The value of private versus public risk and pure altruism: an experimental economics test

In 1996, Johannesson <italic>et al</italic>. published a paper entitled ‘The Value of Private Safety versus the Value of Public Safety’. Based on the preliminary evidence from a hypothetical contingent valuation study for public and private safety, these authors argue that consumers behave as ‘pure altruists’ who consider the cost of a program that might be imposed on other voters when they determine their maximum willingness-to-pay for public safety programs. The authors conclude that further empirical research in this area is warranted. This article presents a set of laboratory economics experiments to test Johannesson <italic>et al</italic>.'s conjecture under controlled conditions in which participants face an actual risk of financial loss. The laboratory results extend those of Johannesson <italic>et al</italic>.'s, providing strong evidence of pure altruism in coercive settings involving public risks.