Herrera Araujo, Daniel Andres, Rheinberger, Christoph M. and Hammitt, James K. (2022) Valuing non-marginal changes in mortality and morbidity risk. TSE Working Paper, n. 22-1331

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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 su˙er 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 percentages. 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.

Item Type: Monograph (Working Paper)
Language: English
Date: April 2022
Uncontrolled Keywords: Value per Statistical Life, Value per Statistical Case, non-marginal risks reductions, scope sensitivity
JEL Classification: D10 - General
D81 - Criteria for Decision-Making under Risk and Uncertainty
I1 - Health
Q51 - Valuation of Environmental Effects
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 02 May 2022 07:31
Last Modified: 02 May 2022 07:31
OAI Identifier: oai:tse-fr.eu:126887
URI: https://publications.ut-capitole.fr/id/eprint/45295
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