Hammitt, James K. and Treich, Nicolas (2022) Prioritarianism and fatality risk regulation. In: Prioritarianism in practice Adler, Matthew D. and Norheim, Ole F. (eds.) Cambridge University Press. Chapter 7. Cambridge. p. 317 - 359. ISBN 978-1-108-48093-2

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Identification Number : 10.1017/9781108691734.007


Environmental, transportation, occupational, and other regulations that reduce fatality risk are frequently evaluated using benefit-cost analysis (BCA). We examine how risk reductions are valued under BCA, utilitarian and prioritarian SWFs. The social value of risk reduction (SVRR) to an individual is the rate of increase of social welfare for a small decrease to the individual’s current-period fatality risk. Under BCA, the SVRR is the individual’s value per statistical life (VSL), which is increasing in wealth and baseline risk. Under utilitarian and prioritarian SWFs, the SVRR is far less sensitive to income; it can decrease with income for prioritarian SWFs that exhibit sufficient inequality aversion. The SVRR increases with or is independent of baseline risk. Like VSL, it can increase or decrease with age, but prioritarian SWFs assign larger SVRR to younger relative to older individuals than does the utilitarian SWF. Extensions to catastrophe aversion and nonfatal health risks are discussed.

Item Type: Book Section
Language: English
Date: 2022
Place of Publication: Cambridge.
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 27 Jan 2023 16:38
Last Modified: 27 Jan 2023 16:38
OAI Identifier: oai:tse-fr.eu:127778
URI: https://publications.ut-capitole.fr/id/eprint/46756
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