Valuing non-marginal changes in mortality and morbidity risk
Herrera Araujo, Daniel; Rheinberger, Christoph M.; Hammitt, James K (2022), Valuing non-marginal changes in mortality and morbidity risk, Journal of Health Economics, 84, p. 102627. 10.1016/j.jhealeco.2022.102627
TypeArticle accepté pour publication ou publié
Journal nameJournal of Health Economics
MetadataShow full item record
Author(s)Herrera Araujo, Daniel
Laboratoire d'Economie de Dauphine [LEDa]
Paris Jourdan Sciences Economiques [PJSE]
Rheinberger, Christoph M.
Hammitt, James K
Abstract (EN)Many stated-preference studies that seek to estimate the marginal willingness-to-pay (WTP) for reductions in mortality or morbidity risk suffer from inadequate scope sensitivity. One possible reason is that the risk reductions presented to respondents are too small to be meaningful. Survey responses may thus not accurately reflect respondents preferences for health and safety. In this paper we propose a novel approach to estimating the value per statistical life (VSL) or the value per statistical case (VSC) based on larger risk reductions measurable as percent changes. While such non-marginal risk reductions are easier to understand, they introduce well known biases. We propose a methodology to de-bias VSL and VSC estimates derived from the evaluation of non-marginal risk reductions and present a proof of concept using simulated stated preference data.
Subjects / KeywordsValue per statistical life; Value per statistical case; Non-marginal risks reductions; Scope sensitivity
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