A parent willing to pay something to reduce her child’s risk of contracting a serious disease from 10% to 5% may be willing to pay two to three times as much to reduce the risk from 5% to 0%. Why is a decline from 5% to 0% so much more valuable than a decline from 10% to 5%? Because it delivers more than a 5% reduction in risk. It delivers certainty. Both 0% and 100% weigh far more heavily in our minds than the mathematical models of economists say they should.
