IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/20120047.html
   My bibliography  Save this paper

Composite Valuation of Immaterial Damage in Flooding: Value of Statistical Life, Value of Statistical Evacuation and Value of Statistical Injury

Author

Listed:
  • Marija Bockarjova

    (VU University Amsterdam)

  • Piet Rietveld

    (VU University Amsterdam)

  • Erik T. Verhoef

    (VU University Amsterdam)

Abstract

This paper enriches existing valuation literature in a number of ways by presenting context-specific estimates of immaterial damage. First, it offers an estimation of value of statistical life (VOSL) in the context of a natural hazard (flooding). Next, as one of the contributions, alongside with less biased estimate of VOSL (euro 6.8 mln) it also provides estimates of the value of statistical injury (VOSI, euro 92,000), and of the value of statistical evacuation (VOSE, euro 2,400). Our estimated indicators are plausible and stay robust throughout various estimations. For flood protection policy in the Netherlands, a higher value of VOSL forthcoming from this research would imply 'underprotection' under current conditions. Another important finding concerns the composition of the total value of immaterial damages, where value of fatalities or value of evacuation may dominate depending on the prevailing floor risk circumstances. This implies that, first, VOSL is not an adequate proxy for immaterial damages since it understates prospective benefits of designated protective measures. Second, spatially differentiated composition of immaterial damages should be explicitly considered to guide policy decisions.

Suggested Citation

  • Marija Bockarjova & Piet Rietveld & Erik T. Verhoef, 2012. "Composite Valuation of Immaterial Damage in Flooding: Value of Statistical Life, Value of Statistical Evacuation and Value of Statistical Injury," Tinbergen Institute Discussion Papers 12-047/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20120047
    as

    Download full text from publisher

    File URL: http://papers.tinbergen.nl/12047.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Baskaran, Ramesh & Cullen, Ross & Colombo, Sergio, 2010. "Testing different types of benefit transfer in valuation of ecosystem services: New Zealand winegrowing case studies," Ecological Economics, Elsevier, vol. 69(5), pages 1010-1022, March.
    2. Viscusi, W Kip & Zeckhauser, Richard J, 1994. "The Fatality and Injury Costs of Expenditures," Journal of Risk and Uncertainty, Springer, vol. 8(1), pages 19-41, January.
    3. Botzen, W.J.W. & Aerts, J.C.J.H. & van den Bergh, J.C.J.M., 2009. "Willingness of homeowners to mitigate climate risk through insurance," Ecological Economics, Elsevier, vol. 68(8-9), pages 2265-2277, June.
    4. Alberini, Anna & Cropper, Maureen & Krupnick, Alan & Simon, N.B.Nathalie B., 2004. "Does the value of a statistical life vary with age and health status? Evidence from the US and Canada," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 769-792, July.
    5. Dorte Gyrd-Hansen, 2003. "Willingness to pay for a QALY," Health Economics, John Wiley & Sons, Ltd., vol. 12(12), pages 1049-1060.
    6. Grolleau, Gilles & Ibanez, Lisette & Mzoughi, Naoufel, 2009. "Too much of a good thing? Why altruism can harm the environment?," Ecological Economics, Elsevier, vol. 68(7), pages 2145-2149, May.
    7. K. Shanmugam, 2000. "Valuations of Life and Injury Risks," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(4), pages 379-389, August.
    8. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    9. Edmund Penning-Rowsell & Peter Floyd & David Ramsbottom & Suresh Surendran, 2005. "Estimating Injury and Loss of Life in Floods: A Deterministic Framework," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 36(1), pages 43-64, September.
    10. Daniel, Vanessa E. & Florax, Raymond J.G.M. & Rietveld, Piet, 2009. "Flooding risk and housing values: An economic assessment of environmental hazard," Ecological Economics, Elsevier, vol. 69(2), pages 355-365, December.
    11. Bellavance, Franois & Dionne, Georges & Lebeau, Martin, 2009. "The value of a statistical life: A meta-analysis with a mixed effects regression model," Journal of Health Economics, Elsevier, vol. 28(2), pages 444-464, March.
    12. Richardson, Leslie & Loomis, John, 2009. "The total economic value of threatened, endangered and rare species: An updated meta-analysis," Ecological Economics, Elsevier, vol. 68(5), pages 1535-1548, March.
    13. Arianne de Blaeij & Raymond J.G.M. Florax & Piet Rietveld & Erik T. Verhoef, 2000. "The Value of Statistical Life in Road Safety: A Meta-Analysis," Tinbergen Institute Discussion Papers 00-089/3, Tinbergen Institute.
    14. Svensson, Mikael, 2006. "The Value of a Statistical Life in Sweden Estimates from Two Studies using the "Certainty Approach" Calibration," Working Papers 2006:6, Örebro University, School of Business, revised 12 May 2009.
    15. Ole Bonnichsen & Jacob Ladenburg, 2010. "Reducing Status Quo Bias in Choice Experiments – An Application of a Protest Reduction Entreaty," IFRO Working Paper 2010/7, University of Copenhagen, Department of Food and Resource Economics.
    16. Thijs Dekker & Roy Brouwer & Marjan Hofkes & Klaus Moeltner, 2011. "The Effect of Risk Context on the Value of a Statistical Life: a Bayesian Meta-model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(4), pages 597-624, August.
    17. Fankhauser, Samuel & Tol, Richard S.J. & Pearce, David W., 1998. "Extensions and alternatives to climate change impact valuation: on the critique of IPCC Working Group III's impact estimates," Environment and Development Economics, Cambridge University Press, vol. 3(01), pages 59-81, February.
    18. Frankhauser, Samuel & Tol, Richard SJ, 1996. "Climate change costs : Recent advancements in the economic assessment," Energy Policy, Elsevier, vol. 24(7), pages 665-673, July.
    19. Wijnen, Wim & Wesemann, Paul & de Blaeij, Arianne, 2009. "Valuation of road safety effects in cost-benefit analysis," Evaluation and Program Planning, Elsevier, vol. 32(4), pages 326-331, November.
    20. Jonkman, S.N. & Bockarjova, M. & Kok, M. & Bernardini, P., 2008. "Integrated hydrodynamic and economic modelling of flood damage in the Netherlands," Ecological Economics, Elsevier, vol. 66(1), pages 77-90, May.
    21. 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.
    22. repec:reg:rpubli:282 is not listed on IDEAS
    23. Sunstein, Cass R, 2000. "Cognition and Cost-Benefit Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 1059-1103, June.
    24. Costanza, Robert & Farley, Joshua, 2007. "Ecological economics of coastal disasters: Introduction to the special issue," Ecological Economics, Elsevier, vol. 63(2-3), pages 249-253, August.
    25. Olsen, Jan Abel & Donaldson, Cam, 1998. "Helicopters, hearts and hips: Using willingness to pay to set priorities for public sector health care programmes," Social Science & Medicine, Elsevier, vol. 46(1), pages 1-12, January.
    26. Alan Krupnick, 2007. "Mortality-risk Valuation and Age: Stated Preference Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 1(2), pages 261-282, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carel Eijgenraam & Jarl Kind & Carlijn Bak & Ruud Brekelmans & Dick den Hertog & Matthijs Duits & Kees Roos & Pieter Vermeer & Wim Kuijken, 2014. "Economically Efficient Standards to Protect the Netherlands Against Flooding," Interfaces, INFORMS, vol. 44(1), pages 7-21, February.

    More about this item

    Keywords

    cost-benefit analysis; natural hazard; flood risk; stated preferences; choice experiment;

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tin:wpaper:20120047. 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: (Tinbergen Office +31 (0)10-4088900). General contact details of provider: http://edirc.repec.org/data/tinbenl.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.