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Assigning Values To Life: Comparing Methods For Valuing Health Risks

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  • Kuchler, Fred
  • Golan, Elise H.

Abstract

We examine five approaches economists and health policy analysts have developed for evaluating policy affecting health a safety: cost-of-illness, willingness-to-pay, cost-effectiveness analysis, risk-risk analysis, and health-health analysis. We examine the theoretical basis and empirical application of each approach and investigate the influences that assumptions embedded in each approach have on policy guidance. We reach four principal conclusions. First, the approaches are not interchangeable: they measure different things. Even estimates using the same approach are often not comparable because, in practice, there is little consistency in the application of any of the approaches. Second, the usefulness of each approach depends on the unit of account. The philosophical decision to eschew the monetization of health costs or benefits constrains the ability of the approach to rank policy options and to gauge the social desirability of policy. Third, all of the approaches except risk-risk analysis and one variation of cost-effectiveness analysis incorporate the effects of income and circumstance. As a result, policy guidance could be influenced by the distribution of income. Fourth, the theory and practice of willingness-to-pay estimation are in opposition. While it is now common practice for regulatory agencies to adopt the willingness-to-pay approach for estimating health and safety benefits, they do so by assuming away the importance of individual preferences. We build on these four conclusions to suggest the appropriate use of each approach.

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  • Kuchler, Fred & Golan, Elise H., 1999. "Assigning Values To Life: Comparing Methods For Valuing Health Risks," Agricultural Economics Reports 34037, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uerser:34037
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    Cited by:

    1. Golan, Elise H. & Vogel, Stephen J. & Frenzen, Paul D. & Ralston, Katherine L., 2000. "Tracing The Costs And Benefits Of Improvements In Food Safety: The Case Of Hazard Analysis And Critical Control Point Program For Meat And Poultry," Agricultural Economics Reports 34023, United States Department of Agriculture, Economic Research Service.
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    3. Cao, Kay & Gibson, John & Scrimgeour, Frank G., 2005. "An Experimental Approach To Estimating Willingess-Topay For Improvements In Food Safety," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137802, Australian Agricultural and Resource Economics Society.
    4. Nastis, Stefanos A. & Crocker, Thomas D., 2012. "Valuing mother and child health: The intrauterine environment," Economics & Human Biology, Elsevier, vol. 10(3), pages 318-328.
    5. Luis A. Cifuentes & Alan J. Krupnick & Raúl O'Ryan & Michael Toman, 2005. "Urban Air Quality and Human Health in Latin America and the Caribbean," IDB Publications (Working Papers) 2988, Inter-American Development Bank.
    6. Loren W. Tauer & Cameron Nightingale & Renata Ivanek & Yrjö T. Gröhn & Martin Wiedmann, 2007. "Optimal levels of inputs to control Listeria monocytogenes contamination at a smoked fish plant," Agribusiness, John Wiley & Sons, Ltd., vol. 23(2), pages 229-244.
    7. Kuchler, Fred, 2001. "Valuing the Health Benefits of Food Safety: A Proceedings," Miscellaneous Publications 33550, United States Department of Agriculture, Economic Research Service.
    8. Crutchfield, Stephen R. & Kuchler, Fred & Variyam, Jayachandran N., 2001. "Valuing The Health Benefits Of Nutrition Labeling: A Case Study For Meat And Poultry Products," 2001 Annual meeting, August 5-8, Chicago, IL 20559, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Belaya, Vera & Hansen, Heiko & Pinior, Beate, 2012. "Measuring The Costs Of Foodborne Diseases: A Review And Classification Of The Literature," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 138195, German Association of Agricultural Economists (GEWISOLA).
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    11. Ragona, Maddalena & Mazzocchi, Mario, 2008. "Measuring the Impacts of Food Safety Regulations: A Methodological Review," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43864, European Association of Agricultural Economists.
    12. Rodriguez, Elsa M. & Lacaze, Maria Victoria & Lupin, Beatriz, 2007. "Willingness to pay for organic food in Argentina: Evidence from a consumer survey," 105th Seminar, March 8-10, 2007, Bologna, Italy 7873, European Association of Agricultural Economists.
    13. Key, Ross & Burton, Robert O., Jr. & Featherstone, Allen M., 2006. "Agricultural Health and Safety: A Research Agenda for Agricultural Economists," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35461, Southern Agricultural Economics Association.
    14. Namsuk Kim & Roland Mollerus, 2016. "Cost-benefit analysis for identifying institutional capacity building priorities in LDCs: an application to Uganda," CDP Background Papers 030, United Nations, Department of Economics and Social Affairs.
    15. Ragona, Maddalena & Mazzocchi, Mario, 2008. "Impact Evaluation of Food Safety Regulations: A Review of Quantitative Methods," 110th Seminar, February 18-22, 2008, Innsbruck-Igls, Austria 49887, European Association of Agricultural Economists.
    16. Ivanek, Renata & Grohn, Yrjo T. & Tauer, Loren W. & Wiedmann, Martin, 2003. "The Cost and Benefit of Listeria Monocytogenes Food Safety Measures," Working Papers 127249, Cornell University, Department of Applied Economics and Management.
    17. Kuchler, Fred & Ballenger, Nicole, 2002. "Societal Costs of Obesity: How Can We Assess When Federal Interventions Will Pay?," Food Review: The Magazine of Food Economics, United States Department of Agriculture, Economic Research Service, vol. 25(3).
    18. Nicholas Graves & Diana Weinhold & Jennifer A. Roberts, 2005. "Correcting for bias when estimating the cost of hospital-acquired infection: an analysis of lower respiratory tract infections in non-surgical patients," Health Economics, John Wiley & Sons, Ltd., vol. 14(7), pages 755-761.
    19. Erwin Blackstone & Andrew Buck & Simon Hakim, 2007. "The economics of emergency response," Policy Sciences, Springer;Society of Policy Sciences, vol. 40(4), pages 313-334, December.

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