Journal of Health Economics 29 (2010) 364–376 Contents lists available at ScienceDirect Journal of Health Economics journal homepage: www.elsevier.com/locate/econbase The effect of children on adult demands for health-risk reductions Trudy Ann Cameron a,∗ , J.R. DeShazo b , Erica H. Johnson c a Department of Economics, 435 PLC, 1285, University of Oregon, Eugene, OR 97403-1285, United States b School of Public Affairs, UCLA, 3250 Public Policy Building, Box 951656, Los Angeles, CA 90095-1656, United States c School of Business Administration, Gonzaga University, 502 E. Boone, Spokane, WA 99258-0009, United States article info Article history: Received 21 June 2007 Received in revised form 2 December 2009 Accepted 22 February 2010 Available online 1 March 2010 JEL classification: Q51 Q58 D13 I18 Keywords: WTP for a microrisk reduction Value of a statistical life VSL Health risks Stated preference survey abstract We examine patterns in adults’ willingness to pay for health-risk reductions. We allow both their marginal utilities of income and their marginal disutilities from health risks to vary systematically with the struc- tures of their households. Demand by adults for programs which reduce their own health risks is found to be influenced by (1) their parenthood status, (2) the numbers of children in different age brackets currently in their households, (3) the ages of the adults themselves, (4) the latency period before they would fall ill, and (5) whether there will still be children in the household at that time. For younger adults, willingness to pay by parents is greater than for non-parents, and increases with each additional young child. For middle-aged adults, willingness to pay for corresponding risk reductions falls when teenagers are present and falls further with each additional teenager in the household. © 2010 Elsevier B.V. All rights reserved. 1. Introduction Parents can choose to invest in their own health and in the health of their children. Jacobson (2000) developed a theoretical model of family-provided health to more fully explain the determi- nants and dynamics of health investments in adults and children. In her model, investments in each family member’s health are jointly determined by the allocation of income and time made by other family members. Subsequently, Bolin et al. (2001, 2002a,b) have considered models of non-unitary household decision-making to predict inter-adult household allocations of investment in health. This growing and heterogeneous theoretical literature has yet to be confronted with much empirical data on patterns in actual house- holds’ investments in health. We begin to fill this gap in the literature by conducting an empir- ical assessment of the extent to which adults may change their investments in their own health as a function of the numbers and ages of children present in their households. While health invest- ∗ Corresponding author. Tel.: +1 541 346 1242; fax: +1 541 346 1243. E-mail addresses: cameron@uoregon.edu (T.A. Cameron), deshazo@ucla.edu (J.R. DeShazo), johnsone@jepson.gonzaga.edu (E.H. Johnson). ments may take many forms, we focus on investments that reduce current and future health risks from major illnesses. We provide examples of estimates, for specific types of adults in specific types of households, of their willingness to pay (WTP) to reduce the risk of sick-time and lost life-years as a function of household struc- ture. The theoretical predictions of existing models are ambiguous with respect to the direction of adult investment in health-risk reductions in the presence of children, so our empirical findings do not provide a head-to-head testing of existing theories. However, our findings may contribute to future theoretical models by (1) revealing empirical regularities relevant to presently ambiguous theoretical predictions, and (2) highlighting patterns of behavior for which no theory yet exists. Researchers have, of course, looked at many empirical aspects of child health more generally, and at parents’ WTP for improvements in the health of their children. 1 Numerous studies also explore a 1 Some examples from the child health literature include Currie and Hotz (2004), who find that a requirement of more education for day-care providers leads to fewer accidents involving the children in their care. Currie and Moretti (2003) find that an increase in a mother’s education will, among other things, improve the health of her infant. Currie and Neidell (2005) and Chay and Greenstone (2003) look at the measurable negative effects of air pollution on infant health. 0167-6296/$ – see front matter © 2010 Elsevier B.V. All rights reserved. doi:10.1016/j.jhealeco.2010.02.005