Valuing non-marginal changes in mortality and morbidity risk

Daniel Herrera-Araujo, Christoph Rheinberger and James Hammitt

Journal of Health Economics, 2022, vol. 84, issue C

Abstract: Many stated-preference studies that seek to estimate the marginal willingness-to-pay (WTP) for reductions in mortality or morbidity risk suffer from inadequate scope sensitivity. One possible reason is that the risk reductions presented to respondents are too small to be meaningful. Survey responses may thus not accurately reflect respondents preferences for health and safety. In this paper we propose a novel approach to estimating the value per statistical life (VSL) or the value per statistical case (VSC) based on larger risk reductions measurable as percent changes. While such non-marginal risk reductions are easier to understand, they introduce well known biases. We propose a methodology to de-bias VSL and VSC estimates derived from the evaluation of non-marginal risk reductions and present a proof of concept using simulated stated preference data.

Keywords: Value per statistical life; Value per statistical case; Non-marginal risks reductions; Scope sensitivity (search for similar items in EconPapers)
JEL-codes: D10 D81 I1 Q51 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Valuing non-marginal changes in mortality and morbidity risk (2022)
Working Paper: Valuing non-marginal changes in mortality and morbidity risk (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:84:y:2022:i:c:s0167629622000467

DOI: 10.1016/j.jhealeco.2022.102627

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