Valuing Mortality Risk Reductions in Global Benefit-Cost Analysis

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.

Reference

Lisa A. Robinson, James K. Hammitt, and L. O’Keeffe, “Valuing Mortality Risk Reductions in Global Benefit-Cost Analysis”, Journal of Benefit-Cost Analysis, vol. 10, July 2019, pp. 15–50.