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Composite Valuation of Immaterial Damage in Flooding: Value of Statistical Life, Value of Statistical Evacuation and Value of Statistical Injury

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Author Info

  • Marija Bockarjova

    ()
    (VU University Amsterdam)

  • Piet Rietveld

    ()
    (VU University Amsterdam)

  • Erik T. Verhoef

    ()
    (VU University Amsterdam)

Abstract

This paper enriches existing valuation literature in a number of ways by presenting context-specific estimates of immaterial damage. First, it offers an estimation of value of statistical life (VOSL) in the context of a natural hazard (flooding). Next, as one of the contributions, alongside with less biased estimate of VOSL (euro 6.8 mln) it also provides estimates of the value of statistical injury (VOSI, euro 92,000), and of the value of statistical evacuation (VOSE, euro 2,400). Our estimated indicators are plausible and stay robust throughout various estimations. For flood protection policy in the Netherlands, a higher value of VOSL forthcoming from this research would imply 'underprotection' under current conditions. Another important finding concerns the composition of the total value of immaterial damages, where value of fatalities or value of evacuation may dominate depending on the prevailing floor risk circumstances. This implies that, first, VOSL is not an adequate proxy for immaterial damages since it understates prospective benefits of designated protective measures. Second, spatially differentiated composition of immaterial damages should be explicitly considered to guide policy decisions.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 12-047/3.

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Date of creation: 26 Apr 2012
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Handle: RePEc:dgr:uvatin:20120047

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Web page: http://www.tinbergen.nl

Related research

Keywords: cost-benefit analysis; natural hazard; flood risk; stated preferences; choice experiment;

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Cited by:
  1. Marija Bockarjova & Piet Rietveld & Erik T. Verhoef, 2012. "Scale, Scope and Cognition: Context Analysis of Multiple Stated Choice Experiments on the Values of Life and Limb," Tinbergen Institute Discussion Papers 12-046/3, Tinbergen Institute.

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