How to Make a Public Choice About the Value of a Statistical Life: The Case of Road Safety

HEC Montreal, Risk Management Chair Working Paper Series No. 02-02

35 Pages Posted: 16 Jan 2003

See all articles by Georges Dionne

Georges Dionne

HEC Montreal - Department of Finance

Paul Lanoie

HEC Montreal - Institute of Applied Economics

Date Written: May 2002

Abstract

Cost-benefit analysts involved in evaluating projects influencing the risk of death and injury have access to a wide group of studies that provide a large range of estimates of the value of a statistical life (VOSL). It is of course a difficult task to pick the right estimate. This paper discusses the potential avenues available to analysts looking for values of a statistical life and of injuries to be used in cost-benefit analyses of Quebec projects involving changes in road safety. Actually, the discussion is conducted in the context of Quebec, but most of it could easily apply to the rest of Canada. First, we discuss the relevance of looking for an original set of estimates involving a new study and the collection of new data. We present many arguments in favour of such a strategy. Second, if the time or the resources necessary to conduct a new study are not available, we offer an analytical framework that allows one to make a choice of estimates (or of a range of estimates) from existing studies. We conclude that a VOSL of 5 million dollars (CAN $, 2000) would be acceptable. Another contribution of this paper is to present, to our knowledge, the most up-to-date survey of studies on the value of a statistical life covering more than 85 papers.

Keywords: Value of a statistical life, estimate, transportation, road safety, cost-benefit analysis

JEL Classification: D80

Suggested Citation

Dionne, Georges and Lanoie, Paul, How to Make a Public Choice About the Value of a Statistical Life: The Case of Road Safety (May 2002). HEC Montreal, Risk Management Chair Working Paper Series No. 02-02, Available at SSRN: https://ssrn.com/abstract=351700 or http://dx.doi.org/10.2139/ssrn.351700

Georges Dionne (Contact Author)

HEC Montreal - Department of Finance ( email )

3000 Chemin de la Cote-Sainte-Catherine
Montreal, Quebec H3T 2A7
Canada
514-340-6596 (Phone)
514-340-5019 (Fax)

HOME PAGE: http://www.hec.ca/gestiondesrisques/

Paul Lanoie

HEC Montreal - Institute of Applied Economics ( email )

3000, ch. de la Côte-Ste-Catherine
Montréal, Quebec H3T 2A7
Canada

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