Assessing the incorporation of latent variables in the estimation of the value of a statistical life.

For many years, the economic literature has recognized the role of attitudes, beliefs, and perceptions in estimating the value of a statistical life (VSL). However, few applications have attempted to include them. This article incorporates the perceived controllability and concern about traffic and cardiorespiratory risks to estimate VSL using a hybrid choice model (HCM). The HCM allows us to include unobserved heterogeneity and improve behavioral realism explicitly. Using data from a choice experiment conducted in Santiago, Chile, we estimate a VSL of US$3.78 million for traffic risks and US$2.06 million for cardiorespiratory risks. We found that higher controllability decreases the likelihood that the respondents would be willing to pay for risk reductions in both risks. On the other hand, concern about these risks decreases the willingness to pay for traffic risk reductions but increases it for cardiorespiratory risk reductions.

Evaluating Vaccination Programs That Prevent Diseases With Potentially Catastrophic Health Outcomes: How Can We Capture the Value of Risk Reduction?

In the last 5 years, guidelines have been developed for performing cost-effectiveness analyses (CEAs) for the economic evaluation of vaccination programs against infectious diseases. However, these cost-effectiveness guidelines do not provide specific guidance for including the value of reducing the risk of rare but potentially catastrophic health outcomes, such as mortality or long-term sequelae. Alternative economic evaluation methods, including extended CEA, the impact inventory, cost-benefit analyses, willingness to pay or the value of a statistical life, to capture the value of this risk reduction could provide more complete estimates of the value of vaccination programs for diseases with potentially catastrophic health and nonhealth outcomes. In this commentary, using invasive meningococcal disease as an example, we describe these alternative approaches along with examples to illustrate how the benefits of vaccination in reducing risk of catastrophic health outcomes can be valued. These benefits are not usually captured in CEAs that only include population benefits estimated as the quality-adjusted life-years gained and reduced costs from avoided cases.

Economic lessons for COVID-19 pandemic policies.

The COVID-19 pandemic poses novel health issues. However, the benefits and costs of the pandemic and policies to address it have a familiar economic structure. Chief among the health-related benefits are the monetized values of the U.S. mortality costs of $3.9 trillion in 2020. The combined U.S. mortality and morbidity costs are $5.5-5.9 trillion. Global mortality costs in 2020 total $10.1 trillion. The skewed age distribution of COVID-19 illnesses has stimulated increased advocacy of downward adjustments in the value of a statistical life (VSL) for older people. This article examines the role of age for policy analysis generally and for the rationing of scarce medical treatments, such as ventilators. Mortality risk reduction benefits should be based on the reduced probability of death multiplied by the pertinent VSL. Effective communication of risks to foster precautions hinges on the credibility of the information source, which public officials have jeopardized. Efficient control of risks imposes limits on personal freedoms to foster health improvements.

Global mortality benefits of COVID-19 action.

The rapid spread of COVID-19 motivated countries worldwide to mitigate mortality through actions including social distancing, home quarantine, school closures, and case isolation. We estimate the global mortality benefits of these actions. We use county-level data on COVID-19 from January 2020, project the number of mortalities until September 2020, and calculate the global mortality benefits using the age- and country-specific value of a statistical life (VSL). Implementing all four types of actions above would save approximately 40.76 trillion USD globally, with social distancing accounting for 55% of the benefits. The monetary benefit would be the largest in the US, Japan and China. Our findings indicate that global actions during COVID-19 have substantial economic benefits and must be implemented in response to COVID-19.

The Value of a Statistical Life for Risk-Averse and Risk-Seeking Individuals.

This article estimates the value of a statistical life (VSL) for Chile under the hedonic wage method while accounting for individual risk preferences. Two alternative measures of risk aversion are used. First, risk aversion is directly measured using survey measures of preferences over hypothetical gambles, and second, over observed individual behaviors that may proxy for risk preferences, such as smoking status, are used. I reconcile the results with a theoretical model of economic behavior that predicts how the wage-risk tradeoff changes as risk aversion differs across individuals. The VSL estimates range between 0.61 and 8.68 million dollars. The results using smoking behavior as a proxy for risk attitudes are consistent with previous findings. However, directly measuring risk aversion corrects the wage-risk tradeoff estimation bias in the opposite direction. The results are robust to other observed measures of risk aversion such as drinking behavior and stock investments. Results suggest that, consistent with the literature that connects smoking behavior with labor market outcomes, smoking status could be capturing poor health productivity effect in addition to purely risk preferences.

Assessing whether there is a cancer premium for the value of a statistical life.

This article estimates whether there is a cancer risk premium for the value of a statistical life using stated preference valuations of cancer risks for a large, nationally representative US sample. The present value of an expected cancer case that occurs after a one decade latency period is $10.85m, consistent with a cancer premium that is 21% greater than the median value of a statistical life estimates for acute fatalities. This cancer premium is smaller than the premium proposed for policy analyses in the UK and the USA. There is also a greater premium for policies that reduce cancer risks to zero and for risk reductions affecting those who perceive themselves to have a greater than average probability of having cancer.

Valuing mortality attributable to present and future temperature extremes in Argentina.

This study analyzes the weather-related health damage of present and future extreme temperatures in Argentina. Focusing on mortality, short-term impacts of temperature are obtained by regressing monthly mortality rates on inter-annual monthly weather variability. For this purpose, a countrywide panel dataset at the municipal level was constructed from the universe of deaths between 2010 and 2019, and daily meteorological records from the ERA5 weather dataset. Then, NASA Earth Exchange Global Daily Downscaled Projections (NEX-GDDP) are used to project future mortality by 2085 under two climate scenarios. Finally, present and future mortality-related economic damages are assessed using the Value of a Statistical Life. The results show that one additional day of extreme temperatures increase all-cause mortality rates relative to mild weather and that the impact of hotter-than-average temperatures is greater in magnitude than that of colder ones. Substantial heterogeneity exists between causes of death and age groups, with older people facing greater risks, while the results for gender are inconclusive. All days of extreme cold in a year generate damage equivalent to 0.64% of GDP, while heat damage is 0.11% of GDP. The total damage by extreme temperatures adds up to 0.75% of the 2019 GDP. When future temperatures are valued, the total damage increases by an additional 1.45% under scenario RCP8.5 because the lower mortality occurring on cold days only partially offsets the increase in the number of hot days. On the contrary, if temperature changes were to be mild (i.e., under scenario RCP4.5), overall mortality would be lower at the national level and the corresponding damages would decrease by 0.02%.

Correlated random parameters model with heterogeneity in means for analysis of factors affecting the perceived value of road accidents and travel time.

Road safety funding and management have become important issues in improving the quality of life of road users and there is evidence of a difference in driving behavior and the factor of road use between urban and rural areas, which is, in turn, reflected in different road safety evaluations. The purpose of this study is to assess the financial losses caused by road accidents on Thailand's highways and the related factors empirically, deploying the willingness-to-pay (WTP) approach. Data were obtained from 640 urban and 960 rural car drivers using a stated choice questionnaire and face-to-face interviews. This study used Correlated Random Parameters Binary Logit with Heterogeneity in Means (CRPBLHM) approach to analyze factors affecting WTP. According to the results, the value of a statistical life and injury for urban drivers was 1.63 times higher than that for rural drivers, and the value of travel time reduction per hour for urban drivers is âˆ¼1.14 times higher than that found for rural drivers. Furthermore, the results of the CRPBLHM model reported that there are significant differences between urban and rural drivers' safety intentions and WTP. In the urban model, it was found that driving behavior (ticket, seatbelts, and speed) and weekday trips significantly increase the WTP, whereas household size and gender are unobserved characteristics among drivers. The rural model revealed that a driver's education (bachelor's and master's degrees held), and a necessary trip were significantly associated with drivers' valuation of safety; moreover, it was found that household size, sole earner status, own accident, in possession of a doctoral degree, and being young were significant in acting as unobserved characteristics. The results demonstrated differences in the value of road safety and unobserved heterogeneity among drivers, which influence risk perception and valuation with reference to the area context. Relevant agencies can use the results as a guideline for budget allocation and practical policy-related road safety management.

Altruism and the Statistical Value of Human Life for Policy and Regulation.

Policymakers use estimates of the Value of a Statistical Life (VSL) in performing regulatory reviews to assess the benefits and costs of policies that affect mortality. This paper empirically estimates an adjustment to conventional VSL measures to account for altruistic sentiments and concludes that conventional VSL measures are underestimated by a factor of two to three, suggesting we are greatly undervaluing life in regulatory reviews. This conclusion is attained by estimating the VSL multiplier suggested by Jones-Lee (Econ J 102(410):80-90, 1992), which hinges on assessing whether individuals are more health altruistic than wealth altruistic. The estimated VSL multiplier is greatest for policies that affect children's mortality, as health altruism is dominant regarding children. Supplementary Information: The online version contains supplementary material available at 10.1007/s11205-021-02784-7.

The Monetary Benefits of Reducing Emissions of Dioxin-like Compounds-Century Poisons-Over Half a Century: Evaluation of the Benefit per Ton Method.

The objective of this study is to evaluate the monetary value of health benefits following reductions in century poison dioxin-like compounds for people aged 0-14 years old, 15-64 years old, and persons 65 years or over in Taiwan. The benefit per ton (BPT) method is employed to estimate the monetary value of the benefits of such a reduction from 2021 to 2070 for different age groups in different regions. The results indicate a BPT of US$837,915 per gram of dioxin each year. The results further show that for Taiwan as a whole, the net BPT per gram of dioxin reduction from 2021 to 2025 is US$704 for children, US$42,761 for working-age adults, US$34,817 for older adults, and US$78,282 overall. Reductions in dioxin-like compounds from 2051-2070 will generate 83.93% of the net BPT for the entire country. This is approximately five times the net BPT of emissions reduction from 2021 to 2025. The monetary benefits evaluated in this study indicate that the prevention of health losses caused by the spread and diffusion of dioxin-like compounds have increased significantly. This implies that action must be taken now, along with continued vigilance, to address emission reductions.

Systematic Review to Update 'Value of a Statistical Life' Estimates for Australia.

The value of a statistical life (VSL) estimates individuals' willingness to trade wealth for mortality risk reduction. This economic parameter is often a major component of the quantified benefits estimated in the evaluation of government policies related to health and safety. This study reviewed the literature to update the VSL recommended for Australian policy appraisals. A systematic literature review was conducted to capture Australian primary studies and international review papers reporting VSL estimates published from 2007 to January 2019. International estimates were adjusted for income differences and the median VSL estimate was extracted from each review study. VSL estimates were used to calculate the value of a statistical life year. Of the 18 studies that met the inclusion criteria, two studies were primary Australian studies with a weighted mean VSL of A$7.0 million in 2017 values. The median VSL in the review studies was A$7.3 million. For Australian public policy appraisals, we recommend the consideration of a base case VSL for people of all ages and across all risk contexts of A$7.0 million. Sensitivity analyses could use a high value of A$7.3 million and a low value that reflects the value (A$4.3 million) currently recommended by the Australian government.

The economic burden of COVID-19 in the United States: Estimates and projections under an infection-based herd immunity approach.

OBJECTIVES: To assess the economic burden of COVID-19 that would arise absent behavioral or policy responses under the herd immunity approach in the United States and compare it to the total burden that also accounts for estimates of the value of lives lost. METHODS: We use the trajectories of age-specific human and physical capital in the production process to calculate output changes based on a human capital-augmented production function. We also calculate the total burden that results when including the value of lives lost as calculated from mortality rates of COVID-19 and estimates for the value of a statistical life in the United States based on studies assessing individual's willingness to pay to avoid risks. RESULTS: Our results indicate that the GDP loss associated with unmitigated COVID-19 would amount to a cumulative US$1.4 trillion by 2030 assuming that 60 percent of the population is infected over three years. This is equivalent to around 7.7 percent of GDP in 2019 (in constant 2010 US$) or an average tax on yearly output of 0.6 percent. After applying the value of a statistical life to account for the value of lives lost, our analyses show that the total burden can mount to between US$17 and 94 trillion over the next decade, which is equivalent to an annual tax burden between 8 and 43 percent. CONCLUSION: Our results show that the United States would incur a sizeable burden if it adopted a non-interventionist herd immunity approach. FUNDING: Research reported in this paper was supported by the Alexander von Humboldt Foundation, the Bill & Melinda Gates Foundation (Project INV-006261), and the Sino-German Center for Research Promotion (Project C-0048), which is funded by the German Research Foundation (DFG) and the National Natural Science Foundation of China (NSFC). Preparation of this article was also supported by the Value of Vaccination Research Network (VoVRN) through a grant from the Bill & Melinda Gates Foundation (Grant OPP1158136). The content is solely the responsibility of the authors.

Estimation of economic costs of air pollution caused by motor vehicles in Iran (Isfahan).

Since mobile sources are one of the most important sources of air pollution, this paper tries to estimate the health effects and economic burden due to fine particulate matter (PM2.5) concentrations from motor vehicles. In this regard, we calculate the economic costs of air pollution emitted by vehicles in Isfahan over the period from March 2018 to March 2020. The concentration of urban traffic pollution based on the generalized additive model (GAM) as well as spatial distribution of pollution is estimated. Health effects are evaluated using AirQ+ updated by the WHO European Centre for Environment and Health. Economic burden of mortality attributable air pollution from traffic is calculated using value of a statistical life (VOSL), and the value of life years (VOLY) approach. The results indicated that the number of deaths attributable to PM2.5 from motor vehicles in these two consecutive years was 136 (95%CI: 89-179), and 147 cases (95%CI: 96-194), respectively. The number of years of life lost due to premature death from air pollution was 2079 years annually. The economic costs imposed under VOSL approach were on average USD 51.7 (95%CI: 43-75) million per year, and according to VOLY approach USD 11.5 (95%CI: 9-13) million per year. These results help to analyze the cost-benefit and prioritize control measures to reduce air pollution. In addition, combination of these results with other externality cost of road traffic can take account for urban transportation planning.

Welfare economics of managing an epidemic: an exposition.

This paper reviews recent findings on the normative analysis of private and governmental countermeasures against infectious diseases, focusing on COVID-19. Based on a model that relates the economic activity to infectious disease epidemics, policies that maximize social welfare are considered. Lockdowns in many countries are measures that restrict economic activity over a wide area, and the economic damage they cause is extremely large. Existing studies on the net benefit of lockdown implemented in 2020 have reached mixed conclusions as to whether it is warranted or not. Although the estimates of costs and effects are relatively stable, the setting of the value of a statistical life for converting effects into benefits has a wide range and is also likely to overestimate benefits. Therefore, a careful procedure for setting is particularly crucial to obtain a reliable evaluation of countermeasures. Compared to uniform restriction of activities, taking measures to restrict activities by selecting targets may improve efficiency. Attributes that can be used to select targets include those that can be identified at little or no cost, such as age and industry, and those that can only be identified at a cost, such as close contact with infectious individuals and the presence of pathogens. In comparison to lockdown, these measures may reduce human suffering and economic suffering. No trade-off exists between uniform activity restrictions and selective activity restrictions.

The forgotten numbers: A closer look at COVID-19 non-fatal valuations.

Our research estimates COVID-19 non-fatal economic losses in the U.S. using detailed data on cumulative cases and hospitalizations from January 22, 2020 to July 27, 2020, from the Centers for Disease Control and Prevention (CDC). As of July 27, 2020, the cumulative confirmed number of cases was about 4.2 million with almost 300,000 of them entailing hospitalizations. Due to data collection limitations the confirmed totals reported by the CDC undercount the actual number of cases and hospitalizations in the U.S. Using standard assumptions provided by the CDC, we estimate that as of July 27, 2020, the actual number of cumulative COVID-19 cases in the U.S. is about 47 million with almost 1 million involving hospitalizations. Applying value per statistical life (VSL) and relative severity/injury estimates from the Department of Transportation (DOT), we estimate an overall non-fatal unadjusted valuation of $2.2 trillion for the U.S. with a weighted average value of about $46,000 per case. This is almost 40% higher than the total valuation of $1.6 trillion (using about $11 million VSL from the DOT) for all approximately 147,000 COVID-19 fatalities. We also show a variety of estimates that adjust the non-fatal valuations by the dreaded and uncertainty aspect of COVID-19, age, income, and a factor related to fatality categorization. The adjustments show current overall non-fatal valuations ranging from about $1.5 trillion to about $9.6 trillion. Finally, we use CDC forecast data to estimate non-fatal valuations through November 2020, and find that the overall cumulative valuation increases from about $2.2 trillion to about $5.7 trillion or to about 30% of GDP. Because of the larger numbers of cases involved our calculations imply that non-fatal infections are as economically serious in the aggregate as ultimately fatal infections.

Societal willingness to pay to avoid mortality and morbidity from Clostridioides difficile and carbapenem-resistant Enterobacteriaceae infections in the United States.

BACKGROUND: Clostridioides difficile infection (CDI) is among the most common health care-associated infections in the United States and is increasingly affecting the elderly. Although carbapenem-resistant Enterobacteriaceae (CRE) infections are still relatively uncommon, there are reported increases in the rate of infection for certain strains, such as Klebsiella pneumoniae. This study examines the burden of mortality and morbidity for CDI and CRE infections in the United States and estimates the societal willingness to pay to avoid them. METHODS: We use an analytic model to estimate the number of incident cases and associated health outcomes for CDI and CRE infections. RESULTS: The number of CDI and CRE infection incident cases in the United States in 2016, is estimated at 468,567 and 9,620, respectively. These infections result in a total of 17,630 estimated deaths and 8,624 lost quality-adjusted life years among patients who survive per year. CONCLUSIONS: Given the significant mortality and morbidity from these infections, the estimated societal willingness to pay to avoid them is high at $176.7 billion per year, of which 93.9% ($166.0 billion) is for CDI. Our estimates far exceed the medical care costs for CDIs and CRE infections reported in the literature despite not capturing the additional costs borne by third-party payers. As incident cases increase or resistant strains develop, the societal willingness to pay is also expected to increase.

Quantifying health impacts and economic costs of PM2.5 exposure in Mexican cities of the National Urban System.

OBJECTIVES: To estimate avoidable mortality, potential years of life lost and economic costs associated with particulate matter PM2.5 exposure for 2 years (2013 and 2015) in Mexico using two scenarios of reduced concentrations (i.e., mean annual PM2.5 concentration < 12 µg/m3 and mean annual PM2.5 concentration < 10 µg/m3). METHODS: The health impact assessment method was followed. This method consists of: identification of health effects, selection of concentration-response functions, estimation of exposure, quantification of impacts quantification and economic assessment using the willingness to pay and human capital approaches. RESULTS: For 2013, we included data from 62 monitoring sites in ten cities, (113 municipalities) where 36,486,201 live. In 2015, we included 71 monitoring sites from fifteen cities (121 municipalities) and 40,479,629 inhabitants. It was observed that reduction in the annual PM2.5 average to 10 µg/would have prevented 14,666 deaths and 150,771 potential years of life lost in 2015, with estimated costs of 64,164 and 5434 million dollars, respectively. CONCLUSIONS: Reducing PM2.5 concentration in the Mexican cities studied would reduce mortality by all causes by 8.1%, representing important public health benefits.

Economic benefit of neurosurgical intervention for infant hydrocephalus in Haiti.

OBJECTIVE: Previous models have been utilized in other low- and middle-income countries (LMICs) to explore and assess the cost, sustainability, and effectiveness of infant hydrocephalus treatment. However, similar models have not been implemented in Haiti due to a paucity of data, epidemiology, and outcomes for hydrocephalus. Therefore, the authors utilized previously described economic modeling to estimate the annual cost and benefit of treating hydrocephalus in infants at a neurosurgery referral center, Hospital Bernard Mevs (HBM), in Port-au-Prince, Haiti. METHODS: The authors conducted a retrospective review of data obtained in all children treated for hydrocephalus at the HBM from 2008 to 2015. The raw data were pooled with previously described surgical outcomes for hydrocephalus in other LMICs. Modeling was performed to determine outcomes, neurosurgical costs, disability-adjusted life years (DALYs), and economic benefits of Haitian hydrocephalus treatment during this time frame. Standard account methodology was employed to calculate cost per procedure. Using these formulas, the net economic benefit and cost/DALY were determined for hydrocephalus treatment at HBM from 2008 to 2015. RESULTS: Of the 401 patients treated during the study period, 158 (39.4%) met criteria for postinfectious hydrocephalus, 54 (13.5%) had congenital hydrocephalus, 38 (9.5%) had myelomeningocele, 19 (4.7%) had aqueductal stenosis, and 132 (33%) were not placed into a category. Overall, 317 individuals underwent surgical treatment of their hydrocephalus, averting 3077 DALYs. The total cost of the procedures was $754,000, and the cost per DALY ranged between $86 and $245. The resulting net economic benefit for neurosurgical intervention ranged from $2.5 to $5.5 million. CONCLUSIONS: This work demonstrates the substantial economic benefit of neurosurgical intervention for the treatment of pediatric hydrocephalus at a single hospital in Haiti. Based on DALYs averted, the need for additional centers offering basic neurosurgical services is apparent. A single center offering these services for several days each month was able to generate between $2.5 to $5.5 million in economic benefits, suggesting the need to develop neurosurgical capacity building in Haiti. Ultimately, prevention, screening, and early surgical treatment of these infants represent a public health and socioeconomic requisite for Haiti.

The benefits of avoiding cancer (or dying from cancer): Evidence from a four- country study.

We use stated-preference methods to estimate the cancer Value per Statistical Life (VSL) and Value per Statistical Case (VSCC) from a representative sample of 45-60-year olds in four countries in Europe. We ask respondents to report information about their willingness to pay for health risk reductions that are different from those used in earlier valuation work because they are comprised of two probabilities-that of getting cancer, and that of dying from it (conditional on getting it in the first place). The product of these two probabilities is the unconditional cancer mortality risk. Our hypothetical risk reductions also include two severity-related attributes-quality-of-life impacts and pain. The results show that respondents did appear to have an intuitive grasp of compound probabilities, and took into account each component of the unconditional cancer mortality risk when answering the valuation questions. We estimate the cancer VSL to be between approximately € 2 and 5.950 million, depending on whether the (unconditional) mortality risk was reduced by lowering the chance of getting cancer, increasing the chance of surviving cancer, or both. The VSCC is estimated to be up to € 0.578 million euro, and its magnitude depends on the initial (conditional) cancer mortality and on the improvement in survival. The survey responses show that our measures of cancer severity-impacts on daily activities and pain-have little or no effect on the WTP to reduce the adverse health risks.

Estimating the value of life and injury for pedestrians using a stated preference framework.

INTRODUCTION: The incidence of pedestrian death over the period 2010 to 2014 per 1000,000 in North Cyprus is about 2.5 times that of the EU, with 10.5 times more pedestrian road injuries than deaths. With the prospect of North Cyprus entering the EU, many investments need to be undertaken to improve road safety in order to reach EU benchmarks. METHOD: We conducted a stated choice experiment to identify the preferences and tradeoffs of pedestrians in North Cyprus for improved walking times, pedestrian costs, and safety. The choice of route was examined using mixed logit models to obtain the marginal utilities associated with each attribute of the routes that consumers chose. These were used to estimate the individuals' willingness to pay (WTP) to save walking time and to avoid pedestrian fatalities and injuries. We then used the results to obtain community-wide estimates of the value of a statistical life (VSL) saved, the value of an injury (VI) prevented, and the value per hour of walking time saved. RESULTS: The estimate of the VSL was €699,434 and the estimate of VI was €20,077. These values are consistent, after adjusting for differences in incomes, with the median results of similar studies done for EU countries. The estimated value of time to pedestrians is €7.20 per person hour. CONCLUSIONS: The ratio of deaths to injuries is much higher for pedestrians than for road accidents, and this is completely consistent with the higher estimated WTP to avoid a pedestrian accident than to avoid a car accident. The value of time of €7.20 is quite high relative to the wages earned. PRACTICAL APPLICATIONS: Findings provide a set of information on the VRR for fatalities and injuries and the value of pedestrian time that is critical for conducing ex ante appraisals of investments to improve pedestrian safety.