Health Risk, Inequality Indexes, and Environmental Justice.

Inequality indexes have long been used to analyze distributions of income. Studies have recently begun to use these tools to evaluate the equity of distributions of environmental harm. In response, issues have been raised regarding the appropriateness of using income-based measures in the context of undesirable outcomes. We begin from first principles, identifying a theoretical preference structure under which income-based tools can be appropriate for ranking distributions of "bads." While some critiques of existing applications are valid, they are not a justification for rejecting the approach altogether. Instead, we show how standard income-based measures can be adjusted to accommodate bad outcomes. Rather than inequality indexes, we argue that equally distributed equivalents (EDEs) are well-suited for this purpose since they account for levels and dispersion of outcome distributions. The Kolm-Pollak EDE is particularly useful, having the advantage of consistently evaluating both bads and their complementary goods (e.g., mortality risk and survival probability). As an illustration, we show how these tools can inform an environmental justice analysis of a proposed Environmental Protection Agency (EPA) rule addressing indoor air pollution.

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.

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.

Does mode matter? A comparison of telephone, mail, and in-person treatments in contingent valuation surveys.

The choice of survey mode in contingent valuation research has long been debated in the literature. However, there is limited evidence as to how mode impacts behavior. Using an identical survey administered with telephone, mail, and in-person interviews, this is the first research to examine mode effects using all three commonly employed modes in contingent valuation research. Results show that there is some evidence of social desirability bias in the telephone survey. In addition, the role of income in the decision-making process is an important consideration.