Valuing non-marginal changes in mortality and morbidity risk

Daniel Herrera Araujo, Christoph Rheinberger and James K Hammitt
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Daniel Herrera Araujo: LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
James K Hammitt: Harvard University, TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Authors registered in the RePEc Author Service: Daniel Herrera-Araujo

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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)
Date: 2022
Note: View the original document on HAL open archive server: https://hal.science/hal-03954628v1
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Citations: View citations in EconPapers (4)

Published in Journal of Health Economics, 2022, 84, pp.102627. ⟨10.1016/j.jhealeco.2022.102627⟩

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Journal Article: 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:hal:journl:hal-03954628

DOI: 10.1016/j.jhealeco.2022.102627

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