Willingness to pay (WTP) approaches typically survey individuals about their
willingness to pay to avoid specified health risks. This approach provides an
estimate that potentially captures a variety of cost components, including pain andsuffering, perceived quality of life and lost productivity. Two methods used in this
category include:
− stated preference methods, which do not rely on the presence of an actual
market, but instead elicit values based on an individual’s stated or anticipated
actions
− revealed preference methods, which rely on the assumption that an individual’s
WTP is reflected in their actual actions. This approach uses data from related
markets, such as the real estate market to infer the community’s WTP to avoid
pollutant emissions, or the labour market to infer an individual’s willingness to
accept increased occupational risks of injury or death.