Public Willingness to Pay for Continuous and Probabilistic Hazard Information

Abstract

Investments in new weather forecasting technologies and communication products can be costly and serve the ultimate purpose of protecting life and property. The Forecasting a Continuum of Environmental Threats (FACETs) paradigm attempts to improve technology and communication through the provision of probabilistic hazard information (PHI). The research and technology necessary to produce this information requires a substantial resource investment, but the societal value of the information may outweigh the costs. This study provides an initial estimate of this value by exploring public willingness to pay (WTP) for an app that provides continuously updated, geographically situated PHI that could be utilized during a tornado event. Findings indicate that the mean WTP, in a one-time payment, for this precise hazard information product is $7.53 per person. Aggregated to the US population, the estimated value is between $901 million and $1.56 billion. These findings indicate that federal agencies and private companies are likely to generate a substantial surplus by developing these products and will contribute to improving informed decision-making and protecting lives and property.