Valuing Mortality Risk Reductions in Global Benefit‐Cost Analysis

66 Pages Posted: 28 Jan 2022

See all articles by Lisa A. Robinson

Lisa A. Robinson

Harvard University, Center for Health Decision Science; Harvard University, Center for Risk Analysis

James K. Hammitt

Harvard University

Lucy O'Keeffe

Harvard T.H. Chan School of Public Health

Date Written: January 21, 2022

Abstract

The estimates used to value mortality risk reductions are a major determinant of the benefits of many public health and environmental policies. These estimates (typically expressed as the value per statistical life, VSL) describe the willingness of those affected by a policy to exchange their own income for the risk reductions they experience. While these values are relatively well studied in high income countries, less is known about the values held by lower-income populations. We identify 26 studies conducted in the 172 countries considered low- or middle-income in any of the past 20 years; several have significant limitations. Thus there are few or no direct estimates of VSL for most such countries. Instead, analysts typically extrapolate values from wealthier countries, adjusting only for income differences. This extrapolation requires selecting a base value and an income elasticity that summarizes the rate at which VSL changes with income. Because any such approach depends on assumptions of uncertain validity, we recommend that analysts conduct a standardized sensitivity analysis to assess the extent to which their conclusions change depending on these estimates. In the longer term, more research on the value of mortality risk reductions in low- and middle-income countries is essential.

Note: This working paper provides more detailed information on the research discussed in: Robinson, L.A., J.K. Hammitt, and L. O’Keeffe. “Valuing Mortality Risk Reductions in Global Benefit-Cost Analysis,” Journal of Benefit-Cost Analysis, 10(S1): 15-50, 2019. https://doi.org/10.1017/bca.2018.26

Keywords: low- and middle-income countries, value of mortality risk reductions, value per statistical life (VSL), willingness to pay

JEL Classification: D6, I1, H4, Q5

Suggested Citation

Robinson, Lisa A. and Hammitt, James K. and O'Keeffe, Lucy, Valuing Mortality Risk Reductions in Global Benefit‐Cost Analysis (January 21, 2022). Available at SSRN: https://ssrn.com/abstract=4014594 or http://dx.doi.org/10.2139/ssrn.4014594

Lisa A. Robinson (Contact Author)

Harvard University, Center for Health Decision Science ( email )

718 Huntington Avenue
Harvard T.H. Chan School of Public Health
Boston, MA 02115
United States

HOME PAGE: http://https://www.hsph.harvard.edu/lisa-robinson/

Harvard University, Center for Risk Analysis ( email )

Harvard T.H. Chan School of Public Health
718 Huntington Avenue
Boston, MA 02115
United States

HOME PAGE: http://https://www.hsph.harvard.edu/lisa-robinson/

James K. Hammitt

Harvard University ( email )

718 Huntington Avenue
Boston, MA 02115
United States
617-432-4343 (Phone)
617-432-0190 (Fax)

Lucy O'Keeffe

Harvard T.H. Chan School of Public Health

718 Huntington Avenue
Boston, MA 02115
United States
6174322013 (Phone)

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