Policy Brief - What's in a Name? A Search for Alternatives to "VSL".

Benefit-cost analyses of environmental, health, and safety regulations often rely on an estimate of the value of statistical life (VSL) to calculate the aggregate benefits of reducing human mortality risk. The VSL represents the marginal rate of substitution between mortality risk and money. Although this concept is well-understood by economists, it is viewed by many non-economists as confusing technical jargon that borders on the immoral. Based on focus groups and a quantitative ranking exercise, this article describes a systematic approach for identifying and testing alternatives to the VSL terminology, with the goal of identifying an alternative term that more clearly communicates the VSL concept to a broad audience.

Preterm birth and economic benefits of reduced maternal exposure to fine particulate matter.

Preterm birth (PTB) is a predictor of infant mortality and later-life morbidity. Despite recent declines, PTB rates remain high in the United States. Growing research suggests a possible relationship between a mother's exposure to common air pollutants, including fine particulate matter (PM2.5), and PTB of her baby. Many policy actions to reduce exposure to common air pollutants require benefit-cost analysis (BCA), and it's possible that PTB will need to be included in BCA in the future. However, an estimate of the willingness to pay (WTP) to avoid PTB risk is not available, and a comprehensive alternative valuation of the health benefits of reducing pollutant-related PTB currently does not exist. This paper demonstrates an approach to assess potential economic benefits of reducing PTB resulting from environmental exposures when an estimate of WTP to avoid PTB risk is unavailable. We utilized a recent meta-analysis, county-level air quality data and county-level PTB prevalence data to estimate the potential health and economic benefits of a reduction in air pollution-related PTB, with PM2.5 as our case study pollutant. Using this method, a simulated nationwide 10% decrease from 2008 PM2.5 levels resulted in an estimated reduction of 5016 PTBs and benefits of at least $339 million, potentially reaching over one billion dollars when considering later-life effects of PTB.

Beyond the RfD: Broad Application of a Probabilistic Approach to Improve Chemical Dose-Response Assessments for Noncancer Effects.

BACKGROUND: The National Academies recommended risk assessments redefine the traditional noncancer Reference Dose (RfD) as a probabilistically derived risk-specific dose, a framework for which was recently developed by the World Health Organization (WHO). OBJECTIVES: Our aim was to assess the feasibility and implications of replacing traditional RfDs with probabilistic estimates of the human dose associated with an effect magnitude M and population incidence I (HDMI). METHODS: We created a comprehensive, curated database of RfDs derived from animal data and developed a standardized, automated, web-accessible probabilistic dose-response workflow implementing the WHO framework. RESULTS: We identified 1,464 RfDs and associated endpoints, representing 608 chemicals across many types of effects. Applying our standardized workflow resulted in 1,522 HDMI values. Traditional RfDs are generally within an order of magnitude of the HDMI lower confidence bound for I=1% and M values commonly used for benchmark doses. The greatest contributor to uncertainty was lack of benchmark dose estimates, followed by uncertainty in the extent of human variability. Exposure at the traditional RfD frequently implies an upper 95% confidence bound of several percent of the population affected. Whether such incidences are considered acceptable is likely to vary by chemical and risk context, especially given the wide range of severity of the associated effects, from clinical chemistry to mortality. CONCLUSIONS: Overall, replacing RfDs with HDMI estimates can provide a more consistent, scientifically rigorous, and transparent basis for risk management decisions, as well as support additional decision contexts such as economic benefit-cost analysis, risk-risk tradeoffs, life-cycle impact analysis, and emergency response. https://doi.org/10.1289/EHP3368.

Valuing Ecological Improvements in the Chesapeake Bay and the Importance of Ancillary Benefits.

Reducing the excess nutrient and sediment pollution that is damaging habitat and diminishing recreational experiences in coastal estuaries requires actions by people and communities that are within the boundaries of the watershed but may be far from the resource itself, thus complicating efforts to understand tradeoffs associated with pollution control measures. Such is the case with the Chesapeake Bay, one of the most iconic water resources in the United States. All seven states containing part of the Chesapeake Bay Watershed were required under the Clean Water Act to submit detailed plans to achieve nutrient and sediment pollution reductions. The implementation plans provide information on the location and type of management practices making it possible to project not only water quality improvements in the Chesapeake Bay but also improvements in freshwater lakes throughout the watershed, which provide important ancillary benefits to people bearing the cost of reducing pollution to the Bay but unlikely to benefit directly. This paper reports the results of a benefits study that links the forecasted water quality improvements to ecological endpoints and administers a stated preference survey to estimate use and nonuse value for aesthetic and ecological improvements in the Chesapeake Bay and watershed lakes. Our results show that ancillary benefits and nonuse values account for a substantial proportion of total willingness to pay and would have a significant impact on the net benefits of pollution reduction programs.

Meeting report: Estimating the benefits of reducing hazardous air pollutants--summary of 2009 workshop and future considerations.

BACKGROUND: Quantifying the benefits of reducing hazardous air pollutants (HAPs, or air toxics) has been limited by gaps in toxicological data, uncertainties in extrapolating results from high-dose animal experiments to estimate human effects at lower doses, limited ambient and personal exposure monitoring data, and insufficient economic research to support valuation of the health impacts often associated with exposure to individual air toxics. OBJECTIVES: To address some of these issues, the U.S. Environmental Protection Agency held the Workshop on Estimating the Benefits of Reducing Hazardous Air Pollutants (HAPs) in Washington, DC, from 30 April to 1 May 2009. DISCUSSION: Experts from multiple disciplines discussed how best to move forward on air toxics benefits assessment, with a focus on developing near-term capability to conduct quantitative benefits assessment. Proposed methodologies involved analysis of data-rich pollutants and application of this analysis to other pollutants, using dose-response modeling of animal data for estimating benefits to humans, determining dose-equivalence relationships for different chemicals with similar health effects, and analysis similar to that used for criteria pollutants. Limitations and uncertainties in economic valuation of benefits assessment for HAPS were discussed as well. CONCLUSIONS: These discussions highlighted the complexities in estimating the benefits of reducing air toxics, and participants agreed that alternative methods for benefits assessment of HAPs are needed. Recommendations included clearly defining the key priorities of the Clean Air Act air toxics program to identify the most effective approaches for HAPs benefits analysis, focusing on susceptible and vulnerable populations, and improving dose-response estimation for quantification of benefits.

Risk assessment for benefits analysis: framework for analysis of a thyroid-disrupting chemical.

Benefit-cost analysis is of growing importance in developing policies to reduce exposures to environmental contaminants. To quantify health benefits of reduced exposures, economists generally rely on dose-response relationships estimated by risk assessors. Further, to be useful for benefits analysis, the endpoints that are quantified must be expressed as changes in incidence of illnesses or symptoms that are readily understood by and perceptible to the layperson. For most noncancer health effects and for nonlinear carcinogens, risk assessments generally do not provide the dose-response functions necessary for economic benefits analysis. This article presents the framework for a case study that addresses these issues through a combination of toxicology, epidemiology, statistics, and economics. The case study assesses a chemical that disrupts proper functioning of the thyroid gland, and considers the benefits of reducing exposures in terms of both noncancer health effects (hypothyroidism) and thyroid cancers. The effects are presumed to be due to a mode of action involving interference with thyroid-pituitary functioning that would lead to nonlinear dose response. The framework integrates data from animal testing, statistical modeling, human data from the medical and epidemiological literature, and economic methodologies and valuation studies. This interdisciplinary collaboration differs from the more typical approach in which risk assessments and economic analyses are prepared independently of one another. This framework illustrates particular approaches that may be useful for expanded quantification of adverse health effects, and demonstrates the potential of such interdisciplinary approaches. Detailed implementation of the case study framework will be presented in future publications.

Linking economics and risk assessment.

Benefit-cost analysis relies heavily upon risk assessment. The extent to which benefits can be quantitatively included in an economic analysis is frequently determined by risk assessment methods. Therefore, interdisciplinary collaboration between economists and experts in risk assessment-related disciplines is critical to further development of quantitative human health benefits analysis. To further lay the groundwork for such collaborations, this article reviews the economic foundations of benefit-cost analysis, identifies implications of incorporating this approach into risk assessment, and suggests future cooperation between economists and risk assessors.

What to do at low doses: a bounding approach for economic analysis.

To quantify the health benefits of environmental policies, economists generally require estimates of the reduced probability of illness or death. For policies that reduce exposure to carcinogenic substances, these estimates traditionally have been obtained through the linear extrapolation of experimental dose-response data to low-exposure scenarios as described in the U.S. Environmental Protection Agency's Guidelines for Carcinogen Risk Assessment (1986). In response to evolving scientific knowledge, EPA proposed revisions to the guidelines in 1996. Under the proposed revisions, dose-response relationships would not be estimated for carcinogens thought to exhibit nonlinear modes of action. Such a change in cancer-risk assessment methods and outputs will likely have serious consequences for how benefit-cost analyses of policies aimed at reducing cancer risks are conducted. Any tendency for reduced quantification of effects in environmental risk assessments, such as those contemplated in the revisions to EPA's cancer-risk assessment guidelines, impedes the ability of economic analysts to respond to increasing calls for benefit-cost analysis. This article examines the implications for benefit-cost analysis of carcinogenic exposures of the proposed changes to the 1986 Guidelines and proposes an approach for bounding dose-response relationships when no biologically based models are available. In spite of the more limited quantitative information provided in a carcinogen risk assessment under the proposed revisions to the guidelines, we argue that reasonable bounds on dose-response relationships can be estimated for low-level exposures to nonlinear carcinogens. This approach yields estimates of reduced illness for use in a benefit-cost analysis while incorporating evidence of nonlinearities in the dose-response relationship. As an illustration, the bounding approach is applied to the case of chloroform exposure.

Valuation of childhood risk reduction: the importance of age, risk preferences, and perspective.

This article explores two problems analysts face in determining how to estimate values for children's health and safety risk reductions. The first addresses the question: Do willingness-to-pay estimates for health risk changes differ across children and adults and, if so, how? To answer this question, the article first examines the potential effects of age and risk preferences on willingness to pay. A summary of the literature reporting empirical evidence of differences between willingness to pay for adult health and safety risk reductions and willingness to pay for health and safety risk reductions in children is also provided. The second dimension of the problem is a more fundamental issue: Whose perspective is relevant when valuing children's health effects-society's, children's, adults-as-children, or parents'? Each perspective is considered, followed ultimately by the conclusion that adopting a parental perspective through an intrahousehold allocation model seems closest to meeting the needs of the estimation problem at hand. A policy example in which the choice of perspective affects the outcome of a regulatory benefit-cost analysis rounds out the article and emphasizes the importance of perspective.