Calculating the economic value of non-marginal mortality risk reductions

Diego Cardoso and Ricardo Dahis

Economics Letters, 2024, vol. 237, issue C

Abstract: Benefit–cost analyses in public health typically calculate the benefits of mortality reduction interventions by multiplying the Value of a Statistical Life (VSL) and the expected decrease in fatalities. This procedure approximates the benefits of small mortality changes but is inaccurate for large risk changes because it holds constant the VSL—a marginal rate of substitution. Building on the theoretical framework of the VSL, we derive expressions to calculate the benefits of non-marginal mortality reductions with empirically calibrated compensating variations and illustrate their use.

Keywords: Value of a statistical life; VSL; Benefit–cost analysis; Mortality risk (search for similar items in EconPapers)
JEL-codes: D12 D61 D78 D81 H51 I18 Q51 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:237:y:2024:i:c:s0165176524001563

DOI: 10.1016/j.econlet.2024.111673

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