Abstract
Though the willingness to pay (WTP) method of estimating the value of statistical life (VSL) is a well-accepted criterion, the value is not always adopted by countries following this evidence-based approach. Decision makers sometimes defer taking a decision on the value due to consideration of other sociopolitical interests. As a result, VSL may remain undervalued and that has significant policy implications due to its effect on resource allocation. Cost effectiveness analyses and cost–benefit analyses using quality adjusted life year (QALY) assume that all QALYs are the same. To maintain compatibility and also to estimate the monetary value per QALY (MVQ), it is often assumed that the VSL is the discounted present value of MVQs lost at premature death. There is no strong justification for such an assumption and variations have an impact on resource allocation. The DALY approach was developed primarily to measure the burden of disease in developing countries and cost per DALY averted by an intervention would be compared against a threshold value to determine whether the intervention would be cost effective. The threshold value appears to be ad hoc and not derived following a specific criterion. Though this method was developed for developing countries, it is now often used in some developed countries, causing more uncertainties.
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