Social Willingness to Pay,Mortality Risks and Contingent Valuation

The Willingness-to-Pay approach is the basic justification for the use of the Contingent Valuation method to evaluate public mortality risk reduction programs. However, aggregating unweighted willingness-to-pay is a valid method only when individuals have the same marginal value of money, an unrealistic assumption in the presence of heterogeneity. We show that heterogeneity on wealth and baseline risk (respectively on risk reduction) leads to systematically overestimate (respectively underestimate) the social value of a risk reduction program. Using a recently published Contingent Valuation analysis, we find this overestimation to be quite modest though, approximately 15% in an upper bound case.     

Willingness to pay for mortality risk reductions: Does latency matter?

Using results from two contingent valuation surveys conducted in Canada and the U.S., we explore the effect of a latency period on willingness to pay (WTP) for reduced mortality risk using a structural model. We find that delaying the time at which the risk reduction occurs by 10 to 30 years reduces WTP by more than 60% for respondents in both samples aged 40 to 60 years. The implicit discount rates are equal to 3.0–8.6% for Canada and 1.3–5.6% for the U.S. JEL Classification Q51 · Q58 The findings, interpretations and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the USEPA or of the World Bank, its Executive Directors or the countries they represent.     

A Choice Experiment Approach to the Valuation of Mortality

This paper presents an integrated framework for evaluating the reduction of several types of mortality risk using a Choice Experiment (CE) approach, a type of stated preference technique. Using this approach, we can distinguish the marginal willingness to pay (MWTP) for the amount of risk reduction from the MWTP for the opportunity of risk reduction and therefore calculate the “Quantity-based” Value of a Statistical Life. The risks in our survey include mortality risks due to accident, cancer, and heart disease. The Quantity-based VSL is calculated to be 350 million JPY (in 2002 Japanese Yen, about 2.9 million US dollars). Furthermore, we analyzed the influence of subjective risk perception and population characteristics of the respondents on their MWTP. Estimated results suggest that it is unnecessary to adjust the VSL according to the differences in the type of risk if the VSL is calculated using an adequate approach. However, adjustments for the timing of risk reduction and population characteristics are found to be significant for the execution of benefit transfer.JEL Classification: I18, D81, J17     

Individual and Household Values of Mortality Reductions with Intrahousehold Bargaining

I derive alternative measures of maximum willingness to pay (WTP) and value of statistical life (VSL) for selfish members of two-person households who bargain efficiently over consumption of individual and household goods. There is then no systematic bias in letting one member conduct the valuation on behalf of the household. Public-good VSL may exceed private-good VSL when each member attaches (selfish) preferences to survival of the spouse, and to any income from a surviving spouse in period 2. When period 2 is a retirement period and household members’ incomes are fixed, interview surveys tend to overvalue VSL due to ignored negative effects of own survival on private of public pension budgets.JEL Classification: I12, G22, J17     

Saving Lives: A Review of the Record

I present evidence on the cost-effectiveness of 76 regulatory actions promulgated by the Federal government from 1967 to 2001 by updating similar work published by the author in 1986. The paper first responds to several critiques of the original article recently published in prominent law journals by showing that most of the specific criticism is based on misrepresentations and mistakes. Wide differences in cost-effectiveness indicate we could save lives more effectively. Regulations aimed at reducing safety and cardiovascular risks have been more cost-effective than regulations aimed at reducing cancer risks. I suggest several potential regulations that could save lives more cost-effectively than the vast majority of regulations issued to date.     

The Value of a Statistical Life in Transport: Findings from a New Contingent Valuation Study in Sweden

This article presents the results of a contingent valuation study from Sweden aimed at estimating the value of a statistical life (VOSL) in road traffic safety. Data on respondents' own subjective risk was collected by use of visual aids presented in a mail questionnaire. The relationship between willingness-to-pay (WTP) and absolute risk reduction was estimated by using a non-linear, least absolute deviation estimation method. This study generated an income-adjusted VOSL of SEK22.3 million (US$2.6 million). Analysis of WTP's sensitivity to probability variation indicates that in future studies, valuing risk reductions in road traffic, the magnitude of absolute risk and relative risk reductions to consider should be in perceptible range. On addition it should also be possible for respondents to compare the magnitudes of different risk reductions.     

Health-health analysis: A new way to evaluate health and safety regulation

Regulations to promote health and safety that are exceptionally costly relative to the expected health benefits may actually worsen health and safety, since compliance reduces other spending, including private spending on health and safety. Past studies relating income and mortality give estimates of the income loss that induces one death — a value that we call willingness-to-spend (WTS)-to be around 9 to9 to 12 million. Such estimates help identify regulations that do not improve health and safety, and moreover, fail benefit-cost comparisons. WTS is a multiple of the willingness to pay to avert a statistical death. International data yield estimates of WTS and willingness-to-pay in different countries.The views of the authors do not necessarily reflect the views of the Office of Information and Regulatory Affairs or OMB. Thanks are due to Ivy Broder, Kenneth S. Chapman, Govind Hariharan, and W. Kip Viscusi for helpful comments. Some of this material is included in theRegulatory Program of the United States Government, April 1, 1992, March 31, 1993, of the Executive Office of the President.     

The Value of a Statistical Life and the Coefficient of Relative Risk Aversion

Individuals’ risk preferences are estimated and employed in a variety of settings, notably including choices in financial, labor, and product markets. Recent work, especially in financial economics, provides estimates of individuals’ coefficients of relative risk aversion (R’s) in excess of one, and often significantly higher. However, it can be shown that high R’s imply equally high values for the income elasticity of the value of a statistical life. Yet estimates of this elasticity, derived from labor and product markets, are in the range of 0.5 to 0.6. Furthermore, it turns out that even an R below one is difficult to reconcile with these elasticity estimates. Thus, there appears to be an important (additional) anomaly involving individuals’ risk-taking behavior in different market settings.JEL Classification: D80, G11, G12, I10, J17     

Effects of Disease Type and Latency on the Value of Mortality Risk

We evaluate the effects of disease type and latency on willingness to pay (WTP) to reduce environmental risks of chronic, degenerative disease. Using contingent-valuation data collected from approximately 1,200 respondents in Taiwan, we find that WTP declines with latency between exposure to environmental contaminants and manifestation of any resulting disease, at a 1.5 percent annual rate for a 20 year latency period. WTP to reduce the risk of cancer is estimated to be about one-third larger than WTP to reduce risk of a similar chronic, degenerative disease. The value of risk reduction also depends on the affected organ, environmental pathway, or payment mechanism: estimated WTP to reduce the risk of lung disease due to industrial air pollution is twice as large as WTP to reduce the risk of liver disease due to contaminated drinking water.     

On the Definition and Age-Dependency of the Value of a Statistical Life

The value of preventing a fatality or (saving) a statistical life is an important question in health economics as well as environmental economics. This paper adds new insights to several of the issues discussed in the literature. It is shown that the conventional way of measuring the value of a statistical life yields a biased estimate, in general. The major exception is the case where the estimate can be based on an infinitely short drop in the hazard rate. This is so in both life cycle models with and without actuarially fair annuities. Moreover, the claim that there are strong theoretical reasons for believing that the value of statistical life declines with age is shown to be wrong.     

Precautionary behavior and willingness to pay for a mortality risk reduction: Searching for the expected relationship

This paper examines within-sample correlation between six different precautionary behaviors and stated willingness to pay for a mortality risk reduction. The paper also shows estimates of the value of a statistical life based on seat belt and bicycle helmet use as well as based on the stated willingness to pay for a risk reduction in traffic mortality. Contrary to the theoretical expectations, no correlation is found between precautionary behavior and stated willingness to pay. One major explanation is that females and the elderly take more precaution, but state a lower WTP for a risk reduction. The estimates of VSL from the different approaches are $11.0 million, $5.0 million and $2.8 million from stated WTP, bicycle helmet use and seat belt use, respectively.

The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World

A substantial literature over the past thirty years has evaluated tradeoffs between money and fatality risks. These values in turn serve as estimates of the value of a statistical life. This article reviews more than 60 studies of mortality risk premiums from ten countries and approximately 40 studies that present estimates of injury risk premiums. This critical review examines a variety of econometric issues, the role of unionization in risk premiums, and the effects of age on the value of a statistical life. Our meta-analysis indicates an income elasticity of the value of a statistical life from about 0.5 to 0.6. The paper also presents a detailed discussion of policy applications of these value of a statistical life estimates and related issues, including risk-risk analysis.     

Background Risks and the Value of a Statistical Life

We examine the effects of background mortality and financial risks on an individual's willingness to pay to reduce his mortality risk (the value of statistical life or VSL). Under reasonable assumptions about risk aversion and prudence with respect to wealth in the event of survival and with respect to bequests in the event of death, background mortality and financial risks decrease VSL. The effects of large mortality or financial risks on VSL can be substantial, but the effects of small background risks are negligible. These results suggest that the commonplace failure to account for background risk in evaluating VSL is unlikely to produce substantial bias in most applications.     

Risk Perceptions and Value of a Statistical Life for Air Pollution and Traffic Accidents: Evidence from Bangkok,Thailand

This paper presents results of two contingent valuation surveys conducted in Bangkok measuring individuals’ willingness to pay (WTP) to reduce mortality risk arising from two risk contexts: air pollution traffic accidents Results from the risk perception survey disclose that respondents view the two risks differently. WTP to reduce air pollution risk is influenced by degrees of dread, severity, controllability and personal exposure, while WTP to reduce traffic accident risk is influenced by perceived immediate occurrence. Nevertheless, the value of a statistical life (VSL) for both air pollution and traffic accidents are comparable (US$0.74 to $1.32 million and US$0.87 to $1.48 million, respectively). This indicates that the risk perception factor alone has little impact on the VSL, a finding similar to previous studies using program choice indifferences.JEL Classification: I18, D61, J17, J28     

A Multifactorial Approach to Predicting Death Anxiety: Assessing the Role of Religiosity,Susceptibility to Mortality Cues,and Individual Differences

Death anxiety is not only experienced by individuals receiving end-of-life care, but also by family members, social workers, and other service providers who support these individuals. Thus, identifying predictors of individual differences in experienced death anxiety levels may have both theoretical and clinical ramifications. The present study assessed the relative influence of religiosity, susceptibility to mortality cues, state and trait anxiety, and demographic factors in the experience of death anxiety through an online survey distributed to members of two online communities related to end-of-life care. Results indicated that cognitive and emotional susceptibility to mortality cues, as well as gender, predicted differences in death anxiety. Conversely, religiosity and age did not increase the predictive power of the model. Thus, death anxiety may be a function of emotional, cognitive, and sociocultural factors that interact in complex, but predictable, ways to modulate the response to mortality cues that occur in one’s life.     

A Tool for Assessing Truancy Risk Among School Children: Predictive and Construct Validity of the Risk Indicator Survey

ABSTRACT

The Risk Indicator Survey I (RISK I) is a screening tool used to identify the truancy risk level and intervention needs for frequently absent students. Exploratory factor analysis (EFA) and confirmatory factor analysis were used to examine the survey's validity. Sample included 6,239 elementary school children. The RISK I was reduced from 59 items to 32 items on 6 factor subscales, accounting for 49.59% of the variance in EFA. Results support the use of the RISK I as a valid truancy risk screening tool. Future studies should evaluate the RISK I survey tool with a more diverse population.     

社会网络对生活满意度的影响研究——基于京、沪、粤三地的分析

本研究以2008年和2009年在北京市、上海市和广东省进行的“中国家庭追踪调查”的数据为基础,运用多层线性模型和协方差模型探讨了社会网络对生活满意度的影响程度。研究表明,拜年网中朋友的比例、邻里互动频率和非正式社会参与都对生活满意度有积极影响,生活满意度与拜年网规模之间则呈现出“∩”型的相关关系。协方差分析结果表明,社会网络规模的扩大、朋友比例的上升和非正式社会参与频率的增加都有助于提高个人的生活满意度,但邻里互动频率的变化对个人生活满意度的提升作用还有待进一步的研究。     

To be,or not to be,that is the question: An empirical study of the WTP for an increased life expectancy at an advanced age

This study reports an attempt to measure the value of an increased survival probability at advanced ages. It turns out that the average willingness to pay for a program which would increase the expected length of life by one year, conditional on having survived to the age of 75 years, is lower than $1,500. The willingness to pay increases with a person's age, but at a low and seemingly constant rate (1–4 percent per year).     

Analysis of state general sales tax policy: A complementary approach to the effects of causes and the causes of effects

Previous research and theory on state general sales tax policy provide the major factors and components of the sales tax base that affect revenue reliance and tax burden. However, previous research on general sales tax policy has concentrated on individual factors and components of the sales tax base without considering the interdependent and interrelated causes of revenue reliance and tax burden. In addition, regression-based analyses are limited in analyzing the causal conjunctures that affect revenue reliance and tax burden. Thus, this research focused on a complementary approach to the effects of causes and the causes of effects, thereby empirically examining the combined causes of revenue reliance and tax burden through a (fs) QCA analysis of U.S. state data spanning from 2007 to 2010. This study reveals that the combined causes of revenue reliance and tax burden vary as ideal types compared with the effects of real types observed in the panel data analysis. This study contributes to the current literature by examining interrelated and interdependent causal relationships with regard to revenue reliance and tax burden in a complementary manner. State governments must consider the combined effects of causal conjunctures that affect revenue reliance and tax burden.