Abstract
The willingness to pay (WTP) for mortality risk reduction from four causes (lung cancer, other type of cancer, respiratory disease, traffic accident) are estimated using random parameter logit model with data from choice experiment for three regions in Turkey. The value of statistical life (VSL) estimated for Afsin-Elbistan, Kutahya-Tavsanli, Ankara and the pooled case are found as 0.56, 0.35, 0.46 and 0.49 million Purchasing Power Parity (PPP) adjusted 2012 US dollars (USD). Different types of risk cause different VSL estimates and we found the lung cancer premium of 213% against traffic accident. The effects of one-year-delayed provision of risk-reduction service are the reduction of WTP by 482 TL ($318 in PPP adjusted USD) per person on average, and the disutility from status-quo (zero risk reduction) against alternative is found to be 891 TL ($589 in PPP adjusted USD) per person on average. Senior discounts of VSL are partially determined by status-quo preference and the amount of discount decreases once the status-quo bias is removed. The peak VSL is found to be for the age group 30–39 and the average VSL for the age group is 0.8 million PPP adjusted USD). Turkey’s compliance to European Union (EU) air quality standard will cause welfare gains of total 373 million PPP adjusted USD for our study areas in terms of reduced number of premature mortality.
Highlights
The Value of Statistical Life (VSL) has been estimated in various parts of the world and adopted in cost benefit analyses and policy evaluations involving potential direct or indirect changes in mortality risks [1]
Estimation of VSL allows us to convert a change in mortality risk into a specific monetary value which can be included in cost benefit analyses (CBA)
Transfers of WTP estimates to other parts of Turkey have to be done through well-examined benefits transfers, if we focus on the relationship between the national and sample income distributions, the WTP estimates for Afsin-Elbistan and Kutahya-Tavsanli could be good representatives for the rural areas and the national average, respectively
Summary
The Value of Statistical Life (VSL) has been estimated in various parts of the world and adopted in cost benefit analyses and policy evaluations involving potential direct or indirect changes in mortality risks [1]. When a cost benefit analyses (CBA) and an environmental impact assessment regarding a policy or project that affect human mortality is conducted, it is essential to translate the potential increase or decrease in premature mortality into a monetized fashion, since only doing so allows one to conduct a comprehensive CBA and make informed decisions that lead to efficient resource allocations. To the best of our knowledge, estimating the value of statistical life for Turkey, it was impossible to conduct a Turkey-specific complete cost-benefit analysis or health/environmental risk assessment that evaluate the changes in the mortality of the Turkish people. The main objectives of this study were: (1) to estimate VSL for Turkish population using a choice experiment, (2) to measure the impact of risk types on VSL, (3) to observe
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