A double-bounded risk-risk trade-off analysis of heatwave-related mortality risk: Evidence from India

Susan Chilton (), Darren Duxbury, Irene Mussio (), Jytte Seested Nielsen () and Smriti Sharma ()
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Susan Chilton: Newcastle University Business School (Economics)
Irene Mussio: Leeds University Business School, Department of Economics, Lyddon Terrace
Jytte Seested Nielsen: Newcastle University Business School (Economics)
Smriti Sharma: Newcastle University Business School (Economics)

Journal of Risk and Uncertainty, 2024, vol. 68, issue 1, No 1, 23 pages

Abstract: Abstract As climate variability is increasing, extreme events such as temperature fluctuations are expected to become more frequent. Low- and middle-income countries (LMICs) are especially vulnerable to heat-related variability and its ensuing impacts on mortality. Therefore, there is an urgent need to understand how citizens in LMICs trade-off climate-related mortality risks with other risks such as traffic accidents, and what values they place on reducing such risks. As populations in LMICs are income-constrained, we adopt a non-monetary, risk-risk trade-off (RRTO) valuation method instead of the standard willingness-to-pay stated preference-based approach. We estimate the resulting risk premium for heatwave-related mortality risks through an adapted double-bounded, dichotomous choice approach to establish whether, on average, people value avoiding these risks more compared to reducing traffic risks. Using a sample of over 2,300 individuals from across seven states in India, a country with one of the highest heat-related mortality globally, we estimate the heatwave risk mortality premium to be between 2.2–2.9, indicating that on average, individuals weigh reducing heatwave-related mortality risks more than two times that of reducing traffic accident mortality risks. Based on a standard benefit transfer methodology for LMICs, this premium translates to a Value of Statistical Life (VSL) of USD 0.37–2.61 million for India.

Keywords: Climate change; Heatwaves; Context premium; Risk-risk trade-off; Value of statistical life; India (search for similar items in EconPapers)
JEL-codes: I12 Q51 Q54 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11166-023-09422-2

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