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From Minor Ailments to Major Illnesses: A Practical Framework for Valuing Morbidity in Environmental Policy Analysis

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Listed:
  • Mark Dickie
  • Matthew J. Neidell

Abstract

Environmental decisions often impact health, yet morbidity valuation remains challenging, with current approaches like cost-of-illness (COI) measures and Quality-Adjusted Life Years failing to reflect individuals’ willingness to pay to avoid adverse health states. This paper introduces a novel framework for valuing morbidity across health conditions, deriving willingness-to-pay (WTP) estimates using widely available preference weights and a baseline condition with known WTP. Our analysis reveals WTP estimates significantly exceeding commonly used COI measures, indicating undervaluation of health states in policy evaluations. Sensitivity analyses highlight variations consistent with those for the value of statistical life, underscoring the method's robustness. This framework offers a practical tool for integrating morbidity into analyses of environmental policy.

Suggested Citation

  • Mark Dickie & Matthew J. Neidell, 2026. "From Minor Ailments to Major Illnesses: A Practical Framework for Valuing Morbidity in Environmental Policy Analysis," NBER Working Papers 35420, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:35420
    Note: EEE EH PE
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    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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