Valuing Environmental Health Effects – An Economic Perspective

A. Freeman ()

Environmental & Resource Economics, 2006, vol. 34, issue 3, 347-363

Abstract: This paper provides an overview of some of the issues involved in comparing benefit-cost analysis and cost-effectiveness analysis based on quality-adjusted life-years as alternative approaches to assessing environmental policies that affect human health. It concludes that: (i) although QALYs have the advantage of reflecting policy impacts on both health status and longevity in a single scalar measure, they are not consistent with utility theory unless individuals’ preferences satisfy some restrictive conditions; (ii) they do not capture other important aspects of the valuation of changes in mortality and morbidity; (iii) cost-effectiveness analysis based on QALYs as a measure of effectiveness omits non-health related effects of environmental policy; and (iv) it leaves unanswered the important question of what level of environmental regulation is appropriate. Copyright Springer 2006

Keywords: benefit-cost analysis; cost-effectiveness analysis; morbidity; mortality; quality-adjusted life-years (QALYs); value of statistical life (VSL); willingness-to-pay; D61; I18; Q51 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10640-006-9002-6

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