Valuing Mortality Risk in China: Comparing Stated-Preference Estimates from 2005 and 2016

Hammitt, James K., Geng, Fangli, Guo, Xiaoqi and Nielsen, Chris P. (2019) Valuing Mortality Risk in China: Comparing Stated-Preference Estimates from 2005 and 2016. TSE Working Paper, n. 19-1020, Toulouse

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Abstract

We estimate the marginal rate of substitution of income for reduction in current annual mortality risk (the “value per statistical life” or VSL) using stated-preference surveys administered to independent samples of the general population of Chengdu China in 2005 and 2016. We evaluate the quality of estimates by the theoretical criterion that WTP for risk reduction should be strictly positive and nearly proportional to the magnitude of the risk reduction (evaluated by comparing answers between respondents). We test the effect of excluding respondents whose answers violate these validity criteria. For subsamples of respondents that satisfy the criteria, point estimates of the sensitivity of WTP to risk reduction are consistent with theory and yield estimates of VSL that are two to three times larger than estimated using the full samples. Between 2005 and 2016, estimated VSL increased sharply, from about 22,000 USD in 2005 to 550,000 USD in 2016. Income also increased substantially over this period. Attributing the change in VSL solely to the change in income implies an income elasticity of about 2.5.

Item Type: Monograph (Working Paper)
Language: English
Date: June 2019
Place of Publication: Toulouse
Uncontrolled Keywords: value per statistical life, stated preference, willingness to pay
JEL codes: D61 - Allocative Efficiency; Cost-Benefit Analysis
H43 - Project Evaluation; Social Discount Rate
I18 - Government Policy; Regulation; Public Health
Q51 - Valuation of Environmental Effects
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 17 Jun 2019 13:54
Last Modified: 28 Jun 2019 09:14
OAI ID: oai:tse-fr.eu:123115
URI: http://publications.ut-capitole.fr/id/eprint/32554

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