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Willingness to Pay to Reduce Mortality Risks: Evidence from a Three-Country Contingent Valuation Study

Author

Listed:
  • Anna Alberini

  • Alistair Hunt
  • Anil Markandya

Abstract

Valuing a change in the risk of death is a key input into the calculation of the benefits of environmental policies that save lives. Typically such risks are monetized using the Value of a Statistical Life (VSL). Since the majority of the lives saved by environmental policies are those of older persons, there has been much recent debate about whether the VSL should be lower for the elderly to reflect their fewer remaining life years. We conducted a contingent valuation survey in the UK, Italy and France designed to answer this question. The survey was administered in these three countries following a standardized protocol. Our results suggest that the VSL is €1.022 million or €2.264 million, depending on whether we use median or mean WTP. The VSL is not significantly lower for older persons, but is higher for persons who have been admitted to a hospital or emergency room for cardiovascular and respiratory problems. Income is positively and significantly associated with WTP. The income elasticities of the WTP increase gradually with income levels and are between 0.15 and 0.5 for current income levels in EU countries. We use the responses to the WTP questions to estimate the value of an extension in remaining life expectancy. The value of a loss of one year’s life expectancy is €54,000 or €163,000. Copyright Springer 2006

Suggested Citation

  • Anna Alberini & Alistair Hunt & Anil Markandya, 2006. "Willingness to Pay to Reduce Mortality Risks: Evidence from a Three-Country Contingent Valuation Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(2), pages 251-264, February.
    • Handle: RePEc:kap:enreec:v:33:y:2006:i:2:p:251-264
    DOI: 10.1007/s10640-005-3106-2
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    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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