On the benefit transfer of the value of a statistical life

Abstract

Objective: International and domestic benefit transfers of the Value of a Statistical Life (VSL) are conducted and the transfer errors are examined for Turkey. Methods: For the international transfers, (1) unit-value transfer with income adjustment, (2) the method developed by ECOTEC (2001) for EU candidate counties and (3) Value of a Statistical Life (VSL) derived for Turkey by recent literature are examined. For the domestic transfers, transfer errors are compared between unit-value transfer with income adjustment and function transfer methods. Results: While the lower-bound ECOTEC estimate results in the least transfer error, the unit-value transfer with income adjustment using the lower bound OECD value is also confirmed as “Very Good Fit” transfer if the income elasticity of VSL is 2.0-2.5 for the international benefit transfer. For the domestic transfer, unit-value transfer with income adjustment with base value = 740,838 TL (in 2012 TL) and the elasticity = 0.5 resulted in “Good Fit”. When the transfer is necessary between the sites with different background risks, the function transfer with the basic demographic variables could improve the transfer results. Conclusions: We confirmed the applicability of benefit transfer practices for Turkey in both international and domestic context and identified the recommended methods of transfers together with the specific level of the income elasticities of VSL.