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Euthanizing the Value of a Statistical Life

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  • Trudy Ann Cameron

Abstract

For economists, the term "value of a statistical life" (VSL) is an eminently reasonable label for the concept it describes. However, outside our discipline, this terminology has been singularly unhelpful. This article argues that there could be a considerable reduction in wasted resources if economists were to change this terminology to something less incendiary, and that this could help to increase the acceptance of benefit--cost analysis as an input to the decision-making process for environmental, health, and safety regulations. I propose that we change our standard unit of measurement and replace the VSL terminology with "willingness to swap (WTS) alternative goods and services for a microrisk reduction in the chance of sudden death." Analogous terminology would be used for other types of risks to life and health. I also argue that economists' continual pursuit of a single number for "the" VSL is misguided and can be misleading, especially if individual WTS is correlated with the magnitudes of the risk changes. Such "one-size-fits-all" VSLs also hinder our ability to understand the distributional consequences of risk-reducing policies or interventions. Estimates of aggregate risk reduction benefits need to reflect the particular type of risk reduction as well as the characteristics of the affected populations. Copyright 2010, Oxford University Press.

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Bibliographic Info

Article provided by Association of Environmental and Resource Economists in its journal Review of Environmental Economics and Policy.

Volume (Year): 4 (2010)
Issue (Month): 2 (Summer)
Pages: 161-178

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Handle: RePEc:oup:renvpo:v:4:y:2010:i:2:p:161-178

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Cited by:
  1. Trudy Cameron & J. DeShazo & Peter Stiffler, 2010. "Demand for health risk reductions: A cross-national comparison between the U.S. and Canada," Journal of Risk and Uncertainty, Springer, vol. 41(3), pages 245-273, December.
  2. Bert Wee & Piet Rietveld, 2013. "Using value of statistical life for the ex ante evaluation of transport policy options: a discussion based on ethical theory," Transportation, Springer, vol. 40(2), pages 295-314, February.
  3. Doucouliagos, Chris & Stanley, T.D. & Giles, Margaret, 2012. "Are estimates of the value of a statistical life exaggerated?," Journal of Health Economics, Elsevier, vol. 31(1), pages 197-206.
  4. Maureen L. Cropper & James K. Hammitt & Lisa A. Robinson, 2011. "Valuing Mortality Risk Reductions: Progress and Challenges," NBER Working Papers 16971, National Bureau of Economic Research, Inc.
  5. John C. Whitehead & O. Ashton Morgan & William L. Huth & Gregory S. Martin & Richard Sjolander, 2012. "Willingness-to-Pay for Oyster Consumption Mortality Risk Reductions," Working Papers 12-07, Department of Economics, Appalachian State University.
  6. Cameron, Trudy Ann & DeShazo, J.R., 2013. "Demand for health risk reductions," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 87-109.
  7. Shelby Gerking & Mark Dickie & Marcella Veronesi, 2012. "Valuation of Human Health: An Integrated Model of Willingness to Pay for Mortality and Morbidity Risk Reductions," NCEE Working Paper Series 201207, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Oct 2012.
  8. Jonathan M. Lee & Laura O. Taylor, 2014. "Randomized Safety Inspections And Risk Exposure On The Job: Quasi-Experimental Estimates Of The Value Of A Statistical Life," Working Papers 14-05, Center for Economic Studies, U.S. Census Bureau.

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