Valuing deaths or years of life lost? Economic benefits of avoided mortality from early heat warning systems

Aline Chiabai (), Joseph V. Spadaro () and Marc B. Neumann ()
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Aline Chiabai: Basque Centre for Climate Change BC3
Joseph V. Spadaro: Basque Centre for Climate Change BC3
Marc B. Neumann: Basque Centre for Climate Change BC3

Mitigation and Adaptation Strategies for Global Change, 2018, vol. 23, issue 7, No 8, 1159-1176

Abstract: Abstract The study aims to explore the main drivers influencing the economic appraisal of heat warning systems by integrating epidemiological modelling and benefit-cost analysis. To shed insights on heat wave mortality valuation, we consider three valuation schemes: (i) a traditional one, where the value of a statistical life (VSL) is applied to both displaced and premature mortality; (ii) an intermediate one, with VSL applied for premature mortality and value of a life year (VOLY) for displaced mortality; and (iii) a conservative one, where both premature and displaced mortality are quantified in terms of loss of life expectancy, and then valued using the VOLY approach. When applying these three schemes to Madrid (Spain), we obtain a benefit-cost ratio varying from 12 to 3700. We find that the choice of the valuation scheme has the largest influence, whereas other parameters such as attributable risk, displaced mortality ratio, or the comprehensiveness and effectiveness of the heat warning system are less influential. The results raise the question of which is the most appropriate approach to value mortality in the context of heat waves, given that the lower bound estimate for the benefit-cost ratio (option iii using VOLY) is up to two orders of magnitude lower than the value based on the traditional VSL approach (option i). The choice of the valuation methodology has significant implications for public health authorities at the local and regional scale, which becomes highly relevant for locations where the application of the VOLY approach could lead to benefit-cost ratios significantly lower than 1. We propose that specific metrics for premature and displaced VOLYs should be developed for the context of heat waves. Until such values are available, we suggest testing the economic viability of heat warning systems under the three proposed valuation schemes (i–iii) and using values for VOLY commonly applied in air pollution as the health end points are similar. Lastly, periodical reassessment of heat alert plans should be performed by public health authorities to monitor their long-term viability and cost-effectiveness.

Keywords: Heat waves; Heat warning system; Economics of adaptation; benefit-cost ratio; Mortality valuation; VOLY; VSL (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s11027-017-9778-4

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