AN EXAMINATION OF ZERO-RISK EFFECT IN WILLINGNESS-TO-PAY FOR PROTECTIVE ACTIONS

Even when the amount of loss reduction is exactly the same, a protecti ve action that leaves no loss may be valued more than others that leav e some. It is called ''zero-risk effect,'' which was examined in this study. One hundred and forty-four undergraduates rated their willingne ss to pay (WTP) for three protective actions that would leave 800, 400 , or 0 deaths. Results showed that the WTP difference between actions resulting in 400 deaths and no death was larger than that between acti ons resulting in 800 deaths and 400 deaths. The effect was shown not o nly in a negative framing condition, but also in a positive one. The r esults thus established the robustness of zero-risk effect, which cann ot be explained in terms of the negative framing effect. Finally, impl ications for risk management and risk communication were discussed.