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Valuing Changes in Mortality Risk: Lives Saved Versus Life Years Saved

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  • James K. Hammitt

Abstract

This paper provides theoretical background for a symposium on whether the monetary value of changes in mortality risk resulting from environmental policy is best summarized in terms of a ‘value per statistical life’ (VSL) or ‘value per statistical life-year’ (VSLY). The relationship between VSL and VSLY may be clarified by recognizing that any change in an individual's mortality risk can be described by a corresponding shift in her survival curve, which can be summarized by the expected number of lives saved (as a function of time or within a specified time period) or by the expected number of life-years saved. An individual's willingness to pay (WTP) for a shift in her survival curve can be summarized by her average VSL or VSLY for that change. Economic theory suggests that both VSL and VSLY may depend on the individual's initial survival curve, characteristics of the shift, and individual characteristics such as health and income. Neither VSL nor VSLY is likely to be constant across changes in mortality risk. Hence, accurate valuation requires the use of scenario-specific values. The choice between VSL and VSLY summary measures is largely one of convenience. Copyright 2007, Oxford University Press.

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  • James K. Hammitt, 2007. "Valuing Changes in Mortality Risk: Lives Saved Versus Life Years Saved," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 1(2), pages 228-240, Summer.
  • Handle: RePEc:oup:renvpo:v:1:y:2007:i:2:p:228-240
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    File URL: http://hdl.handle.net/10.1093/reep/rem015
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    Cited by:

    1. Johansson-Stenman, Olof & Martinsson, Peter, 2008. "Are some lives more valuable? An ethical preferences approach," Journal of Health Economics, Elsevier, vol. 27(3), pages 739-752, May.
    2. James K. Hammitt, 2017. "Valuing Non-Fatal Health Risks: Monetary and Health-Utility Measures," Revue économique, Presses de Sciences-Po, vol. 68(3), pages 335-356.
    3. Rheinberger, Christoph M. & Hammitt, James K., 2014. "The welfare value of FDA's mercury-in-fish advisory: A dynamic reanalysis," Journal of Health Economics, Elsevier, vol. 37(C), pages 113-122.
    4. Wijnen, Wim & Wesemann, Paul & de Blaeij, Arianne, 2009. "Valuation of road safety effects in cost-benefit analysis," Evaluation and Program Planning, Elsevier, pages 326-331.
    5. Henrik Andersson & Nicolas Treich, 2011. "The Value of a Statistical Life," Chapters,in: A Handbook of Transport Economics, chapter 17 Edward Elgar Publishing.
    6. Lisa A. Robinson & James K. Hammitt, 2013. "Behavioral economics and the conduct of benefit–cost analysis: towards principles and standards," Chapters,in: Principles and Standards for Benefit–Cost Analysis, chapter 10, pages 317-363 Edward Elgar Publishing.
    7. Henrik Andersson & Nicolas Treich, 2011. "The Value of a Statistical Life," Chapters,in: A Handbook of Transport Economics, chapter 17 Edward Elgar Publishing.
    8. Milan Ščasný & Emanuele Massetti & Jan Melichar & Samuel Carrara, 2015. "Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 383-415.
    9. James Hammitt & Tuba Tunçel, 2015. "Preferences for life-expectancy gains: Sooner or later?," Journal of Risk and Uncertainty, Springer, vol. 51(1), pages 79-101, August.
    10. Michael Jones-Lee & Susan Chilton & Hugh Metcalf & Jytte Nielsen, 2015. "Valuing gains in life expectancy: Clarifying some ambiguities," Journal of Risk and Uncertainty, Springer, vol. 51(1), pages 1-21, August.
    11. Evans, Mary F. & Schaur, Georg, 2010. "A quantile estimation approach to identify income and age variation in the value of a statistical life," Journal of Environmental Economics and Management, Elsevier, vol. 59(3), pages 260-270, May.
    12. Jytte Nielsen & Susan Chilton & Michael Jones-Lee & Hugh Metcalf, 2010. "How would you like your gain in life expectancy to be provided? An experimental approach," Journal of Risk and Uncertainty, Springer, vol. 41(3), pages 195-218, December.
    13. Bert van Wee, 2011. "Transport and Ethics," Books, Edward Elgar Publishing, number 14281, September.
    14. Christian Murray & Frederick Lipfert, 2017. "Mortality, Life Expectancy, and Daily Air Pollution for the Frail Elderly in Three U.S. Cities," Working Papers 2017-247-29, Department of Economics, University of Houston.
    15. Damien Sheehan-Connor & Theodore Bergstrom & Rodney Garratt, 2015. "Saving lives with stem cell transplants," Journal of Risk and Uncertainty, Springer, vol. 51(1), pages 23-51, August.
    16. Andrea Leiter, 2011. "Age effects in monetary valuation of reduced mortality risks: the relevance of age-specific hazard rates," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(4), pages 331-344, August.
    17. Robinson Lisa A. & Hammitt James K., 2013. "Skills of the trade: valuing health risk reductions in benefit-cost analysis," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(1), pages 107-130, March.
    18. 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.
    19. Lars Hein & Pete Roberts & Lucia Gonzalez, 2016. "Valuing a Statistical Life Year in Relation to Clean Air," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 18(04), pages 1-24, December.
    20. 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, pages 295-314.
    21. repec:clg:wpaper:2011-02 is not listed on IDEAS

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