Valuing a change in the risk of death is a key input into the calculation of the benefits of environmental policies that save lives. Typically such risks are monetized using the value of a statistical life (VSL). Since the majority of the lives saved by environmental policies are those of older persons, there has been much recent debate about whether the VSL should be lower for the elderly to reflect their fewer remaining life years. We conducted a contingent valuation survey in the UK, Italy and France designed to answer this question. The survey was administered in these three countries following a standardized protocol. Our results suggest that the VSL is 1.022 million euros or 2.264 million euros, depending on whether we use median or mean WTP. The VSL is not significantly lower for older persons, but is higher for persons who have been admitted to a hospital or emergency room for cardiovascular and respiratory problems. Income is positively and significantly associated with WTP. The income elasticities of the WTP increase gradually with income levels and are between 0.15 and 0.5 for current income levels in EU countries. We use the responses to the WTP questions to estimate the value of an extension in remaining life expectancy. The value of a loss of one year's life expectancy is 54,000 euros or 163,000 euros.
- Forgone Income (J170)
- Health Production (I120)
- Environmental Economics
- Government Policy (Q580)
- Value of Life
- Valuation of Environmental Effects (Q510)
Alberini, A., Hunt, A., & Markandya, A. (2006). Willingness to Pay to Reduce Mortality Risks: Evidence from a Three-Country Contingent Valuation Study. Environmental and Resource Economics, 33(2), 251-64. https://doi.org/10.1007/s10640-005-3106-2