Dread and Risk Elimination Premium for the Value of a Statistical Life

Sara Olofsson, Ulf-G. Gerdtham, Lars Hultkrantz and Ulf Persson

Risk Analysis, 2019, vol. 39, issue 11, 2391-2407

Abstract: The value of a statistical life (VSL) is a widely used measure for the value of mortality risk reduction. As VSL should reflect preferences and attitudes to risk, there are reasons to believe that it varies depending on the type of risk involved. It has been argued that cancer should be considered a “dread disease,” which supports the use of a “cancer premium.” The objective of this study is to investigate the existence of a cancer premium (for pancreatic cancer and multiple myeloma) in relation to road traffic accidents, sudden cardiac arrest, and amyotrophic lateral sclerosis (ALS). Data were collected from 500 individuals in the Swedish general population of 50–74‐year olds using a web‐based questionnaire. Preferences were elicited using the contingent valuation method, and a split‐sample design was applied to test scale sensitivity. VSL differs significantly between contexts, being highest for ALS and lowest for road traffic accidents. A premium (92–113%) for cancer was found in relation to road traffic accidents. The premium was higher for cancer with a shorter time from diagnosis to death. A premium was also found for sudden cardiac arrest (73%) and ALS (118%) in relation to road traffic accidents. Eliminating risk was associated with a premium of around 20%. This study provides additional evidence that there exist a dread premium and risk elimination premium. These factors should be considered when searching for an appropriate value for economic evaluation and health technology assessment.

Date: 2019
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https://doi.org/10.1111/risa.13341

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Working Paper: Dread and Risk Elimination Premium for the Value of a Statistical Life (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:39:y:2019:i:11:p:2391-2407

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