The value of a statistical life in Mexico

Abstract

ABSTRACTMexico has been making an increased use of cost–benefit analyses to inform its public policy decisions, in line with other OECD countries. The monetary values used in these analyses have generally been based on benefit transfer methods. There are several reasons to be cautious about the use of benefit transfer values, including that the resulting figures from the procedure can vary widely depending on assumptions. This is particularly pressing where large allocation decisions are at stake, as tends to be the case with air pollution policy and climate change policy. This study collected primary data to produce a value of statistical life for Mexico, using a questionnaire previously employed in several countries, including in the USA (where benefit transfer values tend to be sourced from by Mexican authorities). The analysis produces a value of statistical life of USD 210,880. The evidence suggests that benefit transfer values currently being used by Mexican authorities are being driven by the source values themselves, rather than by inappropriate assumptions about income elasticities or by being affected unduly by other factors. The conclusions offer some recommendations for future use of value of statistical life figures in Mexico.