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Mortality Risk Valuation in Environment, Health and Transport Policies
OECD Publishing, January 2012, Pages: 140
The idea of associating a monetary value with human life is very challenging and can seem insensitive or harsh. Life is indeed priceless, at least when considered from the complex perspective of an individual. However, policy makers are regularly devising policies and regulations that affect people’s risk of death and that seek to protect lives in society, and require methodologies for comparing the costs of reducing risk with the expected benefits in terms of lives saved.
The benefits of prevented mortalities can be expressed in terms of a “Value of a Statistical Life” (VSL), which represents the value a given population places ex ante on avoiding the death of an unidentified individual. VSL is based on the sum of money each individual is prepared to pay for a given reduction in the risk of premature death, for example from diseases linked to air pollution.
The book presents a major meta-analysis of 'value of a statistical life' (VSL) estimates derived from surveys where people around the world have been asked about their willingness to pay for small reduction in mortality risks. The analysis seeks to explain the differences in the estimates, for example across countries. Differences in incomes and the magintude of the risk reduction people have been asked to value were found to be the factors having the strongest impact on VSL, but a number of other policy-relevant factors are also important.
Based on the meta-analysis, and a broad review of the literature, the book also presents clear advice on how VSL values best can be used in assessments of environmental, health and transport policies, such as in cost-benefit analyses. Using explicit VSL estimates to quantify the benefits to society of fatality risk reductions can play an important role in the development of more cost-effective public policies.
Chapter 1. The valuation of mortality risk
-Annex 1.A1. Value of a statistical life year (VOLY)
-Annex 1.A2. An illustration of how VSL estimates have been used
Chapter 2. Meta-database on stated preference studies of mortality risk valuation
Chapter 3. Meta-regression analysis of value of statistical life estimates
-Annex 3.A1. Additional meta-regressions
-Annex 3.A2. A selection of regressions with additional variables
-Annex 3.A3. Studies included in the main meta-regressions
Chapter 4. Using meta-analysis for benefit transfer: Issues and examples
Chapter 5. How to derive Value of a Statistical Life numbers for policy analysis
Chapter 6. Recommended Value of a Statistical Life numbers for policy analysis
Chapter 7. Recommendations for use of Value of a Statistical Life figures in policy assessments
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