Value of Statistical Life (VSL) estimates are often used in the transportation sector. However, in health economics and in the pharmaceutical sector, the value of a quality-adjusted life year (QALY) is used more often than the VSL. Both measures are used in cost-benefit analyzes as a method of assigning a monetary value of improvement or worsening of a person's living conditions. While the QALY measures quality of life ranging from 0 to 1, the VSL monetizes the values using the willingness to payment.[10]​.

Researchers have first attempted to monetize QALY in the 1970s, with countless studies conducted to standardize values ​​between and within countries. However, as with QALY, VSL estimates have also had a history of very different ranges of estimates within countries, despite standardization across countries. One of the biggest moves to do so was the EuroVaQ project which used a sample of 40,000 individuals to develop the VSL from several European countries.[11]​.

Value-of-life estimates are frequently used to estimate the added benefits due to a new policy or law passed by the government. One example is the 6-year retroactive study of the benefits and costs of the Clean Air Act of 1970 in the period 1970 to 1990. This study was commissioned by the United States Environmental Protection Agency (EPA), Office of Air and Radiation, and the Office of Policy, Planning, and Evaluation, but was conducted by an independent board of public health experts, economists, and scientists headed by Dr. Richard Schmalensee from MIT.[12]​.

In conducting the cost-benefit analysis, the team measured each dollar value of an environmental benefit by estimating how many dollars a person is willing to pay to lessen or eliminate a current threat to their health, known as their "willingness to pay" (WTP). The WTP of the United States population was estimated and summed for separate categories including mortality, chronic bronchitis, hypertension, changes in IQ, and stroke. Thus, individual WTPs were summed to obtain the value of a statistical life (VSL) for each category considered in the valuation of the benefits of the act.[12] Each valuation was the product of several studies that compiled both the WTP information requested from individuals and the WTP estimates estimated from the risk compensation required in the current labor market and were averaged to find a singular VSL. These labor market data were taken from the Census of Fatal Occupational Injuries collected by the Bureau of Labor Statistics.[13]​.

For example, the valuation estimates used for mortality were divided by the typical life expectancy of each survey sample to obtain a dollar estimate per year of life lost or saved that was discounted at a 5% discount rate.[14]​.

Using these estimates, the paper concluded that the benefits, ranging from $5.6 to $49.4 trillion in 1990, from implementing the Clean Air Act from 1970 to 1990 exceeded the economic costs of $523 billion in 1990.[12]

Knowing the value of life is useful for conducting a cost-benefit analysis, especially as it relates to public policy. To decide whether a policy is worth pursuing, it is important to accurately measure the costs and benefits. Public programs that address things like safety (i.e., roads, disease control, housing) require accurate assessments to budget spending.[15]​.

Since resources are finite, compromises are inevitable, even when it comes to potential life-or-death decisions. Assigning a value to individual life is one possible approach to attempting to make rational decisions about these trade-offs.

In deciding the appropriate level of health care spending, a typical method is to equate the marginal cost of health care to the marginal benefits received.[16] To obtain a marginal benefit amount, some estimate of the dollar value of life is required. A notable example was found by Stanford professor Stefanos Zenios, whose team calculated the cost-effectiveness of kidney dialysis. His team found that the VSL implicit in then-current dialysis practice averages about $129,000 per quality-adjusted life year (QALY).[17] This calculation has important implications for healthcare, as Zenios explained:

In risk management activities, such as in the areas of workplace safety and insurance, it is often useful to assign a precise economic value to a given life. The Occupational Safety and Health Administration, under the Department of Labor, establishes penalties and regulations for companies to comply with safety standards to prevent injuries and deaths in the workplace.[19] It can be argued that these high penalties are intended to act as a deterrent so that companies have an incentive to avoid them. As such, the price of fines would have to be roughly equivalent to the value of a human life. Although some studies on the effectiveness of fines as a deterrent have found ambiguous results.[20]​.

In means of transportation, it is very important to consider the "external cost" that society pays but which is not calculated, to make it more sustainable. The external cost, although it consists of the impacts on the climate, crops and public health, among others, is largely determined by the impacts on the mortality rate.

Contenido

En muchos países se utilizan parámetros equivalentes, con una variación significativa del valor asignado.[2]​.

Australia

In Australia, the value of a statistical life has been set at:.

New Zealand

In New Zealand, the value of a statistical life has been set at:.

Sweden

In Sweden, the value of a statistical life has been estimated between 9 and 98 million Swedish crowns (0.9 - 10.6 million euros).[23]​.

Türkiye

Studies from Hacettepe University estimated the VSL at around half a million purchasing power parity (PPP) adjusted to 2012 US dollars,[24]​ the value of a longer, healthier life (VHLL) for Turkey at around 42,000 lira (around $27,600 in PPP-adjusted 2012 dollars), and the value of one year of life (VOLY) at around 10,300 TL (around $6,800 in PPP-adjusted 2012 dollars), all as of 2012.[25]​.

In 2016, the estimated lifetime produced economic value of Türkiye was $59,000, which represented 5.4 times GDP per capita.[26]​.

Russia

According to different estimates the value of a life in Russia varies from 40,000 to 2 million dollars. In the opinion poll results, the value of life (as the cost of financial compensation for death) at the beginning of 2015 was about $71,500.[27]​.

USA

The following estimates have been applied to the value of life. The estimates refer to one year of additional life or the statistical value of a single life.

The income elasticity of the value of statistical life has been estimated at 0.5 to 0.6.[33]​ Developing markets have a lower statistical value of life. The statistical value of life also decreases with age.[33]​.

Historically, children were undervalued monetarily, but changes in cultural norms have led to a substantial increase, as evidenced by trends in damages awards from wrongful death lawsuits.[34]​.

Value of Statistical Life (VSL) estimates are often used in the transportation sector. However, in health economics and in the pharmaceutical sector, the value of a quality-adjusted life year (QALY) is used more often than the VSL. Both measures are used in cost-benefit analyzes as a method of assigning a monetary value of improvement or worsening of a person's living conditions. While the QALY measures quality of life ranging from 0 to 1, the VSL monetizes the values using the willingness to payment.[10]​.

Researchers have first attempted to monetize QALY in the 1970s, with countless studies conducted to standardize values ​​between and within countries. However, as with QALY, VSL estimates have also had a history of very different ranges of estimates within countries, despite standardization across countries. One of the biggest moves to do so was the EuroVaQ project which used a sample of 40,000 individuals to develop the VSL from several European countries.[11]​.

Value-of-life estimates are frequently used to estimate the added benefits due to a new policy or law passed by the government. One example is the 6-year retroactive study of the benefits and costs of the Clean Air Act of 1970 in the period 1970 to 1990. This study was commissioned by the United States Environmental Protection Agency (EPA), Office of Air and Radiation, and the Office of Policy, Planning, and Evaluation, but was conducted by an independent board of public health experts, economists, and scientists headed by Dr. Richard Schmalensee from MIT.[12]​.

In conducting the cost-benefit analysis, the team measured each dollar value of an environmental benefit by estimating how many dollars a person is willing to pay to lessen or eliminate a current threat to their health, known as their "willingness to pay" (WTP). The WTP of the United States population was estimated and summed for separate categories including mortality, chronic bronchitis, hypertension, changes in IQ, and stroke. Thus, individual WTPs were summed to obtain the value of a statistical life (VSL) for each category considered in the valuation of the benefits of the act.[12] Each valuation was the product of several studies that compiled both the WTP information requested from individuals and the WTP estimates estimated from the risk compensation required in the current labor market and were averaged to find a singular VSL. These labor market data were taken from the Census of Fatal Occupational Injuries collected by the Bureau of Labor Statistics.[13]​.

For example, the valuation estimates used for mortality were divided by the typical life expectancy of each survey sample to obtain a dollar estimate per year of life lost or saved that was discounted at a 5% discount rate.[14]​.

Using these estimates, the paper concluded that the benefits, ranging from $5.6 to $49.4 trillion in 1990, from implementing the Clean Air Act from 1970 to 1990 exceeded the economic costs of $523 billion in 1990.[12]

Knowing the value of life is useful for conducting a cost-benefit analysis, especially as it relates to public policy. To decide whether a policy is worth pursuing, it is important to accurately measure the costs and benefits. Public programs that address things like safety (i.e., roads, disease control, housing) require accurate assessments to budget spending.[15]​.

Since resources are finite, compromises are inevitable, even when it comes to potential life-or-death decisions. Assigning a value to individual life is one possible approach to attempting to make rational decisions about these trade-offs.

In deciding the appropriate level of health care spending, a typical method is to equate the marginal cost of health care to the marginal benefits received.[16] To obtain a marginal benefit amount, some estimate of the dollar value of life is required. A notable example was found by Stanford professor Stefanos Zenios, whose team calculated the cost-effectiveness of kidney dialysis. His team found that the VSL implicit in then-current dialysis practice averages about $129,000 per quality-adjusted life year (QALY).[17] This calculation has important implications for healthcare, as Zenios explained:

In risk management activities, such as in the areas of workplace safety and insurance, it is often useful to assign a precise economic value to a given life. The Occupational Safety and Health Administration, under the Department of Labor, establishes penalties and regulations for companies to comply with safety standards to prevent injuries and deaths in the workplace.[19] It can be argued that these high penalties are intended to act as a deterrent so that companies have an incentive to avoid them. As such, the price of fines would have to be roughly equivalent to the value of a human life. Although some studies on the effectiveness of fines as a deterrent have found ambiguous results.[20]​.

In means of transportation, it is very important to consider the "external cost" that society pays but which is not calculated, to make it more sustainable. The external cost, although it consists of the impacts on the climate, crops and public health, among others, is largely determined by the impacts on the mortality rate.

Contenido

En muchos países se utilizan parámetros equivalentes, con una variación significativa del valor asignado.[2]​.

Australia

In Australia, the value of a statistical life has been set at:.

New Zealand

In New Zealand, the value of a statistical life has been set at:.

Sweden

In Sweden, the value of a statistical life has been estimated between 9 and 98 million Swedish crowns (0.9 - 10.6 million euros).[23]​.

Türkiye

Studies from Hacettepe University estimated the VSL at around half a million purchasing power parity (PPP) adjusted to 2012 US dollars,[24]​ the value of a longer, healthier life (VHLL) for Turkey at around 42,000 lira (around $27,600 in PPP-adjusted 2012 dollars), and the value of one year of life (VOLY) at around 10,300 TL (around $6,800 in PPP-adjusted 2012 dollars), all as of 2012.[25]​.

In 2016, the estimated lifetime produced economic value of Türkiye was $59,000, which represented 5.4 times GDP per capita.[26]​.

Russia

According to different estimates the value of a life in Russia varies from 40,000 to 2 million dollars. In the opinion poll results, the value of life (as the cost of financial compensation for death) at the beginning of 2015 was about $71,500.[27]​.

USA

The following estimates have been applied to the value of life. The estimates refer to one year of additional life or the statistical value of a single life.

The income elasticity of the value of statistical life has been estimated at 0.5 to 0.6.[33]​ Developing markets have a lower statistical value of life. The statistical value of life also decreases with age.[33]​.

Historically, children were undervalued monetarily, but changes in cultural norms have led to a substantial increase, as evidenced by trends in damages awards from wrongful death lawsuits.[34]​.