The Social Value of Mortality Risk Reduction: VSL vs. the Social Welfare Function Approach
We examine how different welfarist frameworks evaluate the social value of mortality riskreduction. These frameworks include classical, distributively unweighted cost-benefit analysisâ€”i.e., the â€œvalue per statistical lifeâ€ (VSL) approachâ€”and three benchmark social welfare functions (SWF): a utilitarian SWF, an ex ante prioritarian SWF, and an ex post prioritarian SWF. We examine the conditions on individual utility and on the SWF under which these frameworks display the following five properties: i) wealth sensitivity, ii) sensitivity to baseline risk, iii) equal value of risk reduction, iv) preference for risk equity, and v) catastrophe aversion. We show that the particular manner in which VSL ranks risk-reduction measures is not necessarily shared by other welfarist frameworks, and we identify when the use of an ex ante or an ex post approach has different implications for risk policymaking.
|Date of creation:||Mar 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+33) 5 61 12 86 23
Web page: http://www.toulouse.inra.fr/lerna/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rachel Baker & Susan Chilton & Michael Jones-Lee & Hugh Metcalf, 2008. "Valuing lives equally: Defensible premise or unwarranted compromise?," Journal of Risk and Uncertainty, Springer, vol. 36(2), pages 125-138, April.
- Samuel Fankhauser & Richard Tol & DAVID Pearce, 1997. "The Aggregation of Climate Change Damages: a Welfare Theoretic Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(3), pages 249-266, October.
- Marc Fleurbaey, 2010.
"Assessing Risky Social Situations,"
Journal of Political Economy,
University of Chicago Press, vol. 118(4), pages 649-680, 08.
- Marc Fleurbaey, 2007. "Assessing Risky Social Situations," IDEP Working Papers 0703, Institut d'economie publique (IDEP), Marseille, France, revised Jan 2007.
- Marc Fleurbaey, 2009. "Assessing risky social situations," LSE Research Online Documents on Economics 27006, London School of Economics and Political Science, LSE Library.
- FLEURBAEY, Marc, . "Assessing risky social situations," CORE Discussion Papers RP -2289, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Ralph L. Keeney, 1980. "Utility Functions for Equity and Public Risk," Management Science, INFORMS, vol. 26(4), pages 345-353, April.
- E.Somanathan, 2003.
"Valuing lives equally: Distributional weights for welfare analysis,"
Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers
03-02, Indian Statistical Institute, New Delhi, India.
- Somanathan, E., 2006. "Valuing lives equally: Distributional weights for welfare analysis," Economics Letters, Elsevier, vol. 90(1), pages 122-125, January.
- HAMMITT James K & TREICH Nicolas, 2006.
"Statistical vs. Identified Lives in Benefit-Cost Analysis,"
LERNA Working Papers
06.11.204, LERNA, University of Toulouse.
- James Hammitt & Nicolas Treich, 2007. "Statistical vs. identified lives in benefit-cost analysis," Journal of Risk and Uncertainty, Springer, vol. 35(1), pages 45-66, August.
- James K. Hammitt & Nicolas Treich, 2007. "Statistical vs. Identified Lives in Benefit-Cost Analysis," CESifo Working Paper Series 1931, CESifo Group Munich.
- Ulph, Alistair, 1982. "The role of ex ante and ex post decisions in the valuation of life," Journal of Public Economics, Elsevier, vol. 18(2), pages 265-276, July.
- Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
- Pratt, John W & Zeckhauser, Richard J, 1996. "Willingness to Pay and the Distribution of Risk and Wealth," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 747-63, August.
- Olof Johansson-Stenman, 2000. "On the Value of Life in Rich and Poor Countries and Distributional Weights Beyond Utilitarianism," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(3), pages 299-310, November.
- Ben-Porath, Elchanan & Gilboa, Itzhak & Schmeidler, David, 1997. "On the Measurement of Inequality under Uncertainty," Journal of Economic Theory, Elsevier, vol. 75(1), pages 194-204, July.
When requesting a correction, please mention this item's handle: RePEc:ler:wpaper:25735. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maxime MARTY)
If references are entirely missing, you can add them using this form.