Value Of Statistical Life Year Research Articles

Economic costs related to foodborne disease in Burkina Faso and Ethiopia in 2017

IntroductionFoodborne diseases (FBD) are a significant problem in low- and middle-income countries, especially in Africa. Country-specific estimates of the economic costs related to FBD caused by different hazards in different food products can inform decision makers about this problem’s magnitude. This aids policy makers in prioritising actions to mitigate risks and prevent illness. Although estimates exist for many high-income countries, they are lacking for African countries.MethodsThis study estimates economic cost in Burkina Faso and Ethiopia related to FBD caused by non-typhoidal Salmonella enterica (NTS), Campylobacter spp. (CAMP) and enterotoxigenic Escherichia coli (ETEC) in all foods, chicken meat and tomatoes. The World Health Organization’s estimates of FBD burden, updated from 2010 to 2017, were used as a basis. Economic cost estimates were the sum of estimates of willingness-to-pay (WTP) to reduce risk of death and of pain and suffering, and lost productivity. WTP was based on value of statistical life (VSL) and value of statistical life year (VSLY), extrapolated from USA data. We used sensitivity options to account for uncertainty in these values.ResultsMean economic costs related to FBD caused by NTS, CAMP and ETEC in 2017 were estimated at 391 million constant 2017 international dollars in Burkina Faso and 723 million in Ethiopia. These represent 3.0% of gross national income in Burkina Faso and 0.9% in Ethiopia. Lost productivity contributed 70%, WTP to reduce risk of death 30%, and WTP to reduce risk of pain and suffering 1-2%. NTS caused the highest costs, followed by ETEC and CAMP. Chicken meat caused 9-12 times higher costs than tomatoes. Children under five years (14.6-17.1% of populations) bore 20-75% of the costs. Due to uncertainty in disease burden and economic data, costs could be four times higher than mean estimates.DiscussionPolicies to control FBD likely result in substantial benefits, especially efforts aiming at this study’s hazards in chicken meat and children under 5 years. Efforts to reduce uncertainty in VSL, VSLY and disease burden estimates, estimate costs for other countries, attribute costs to other food products and hazards, further standardise estimation methodologies, and estimate treatment costs and illness prevention expenditures are recommended.

Sustainable Development Goal Halftime Project: Benefit-Cost Analysis Using Methods from the Decade of Vaccine Economics Model

AbstractIn 2023, the world will be at “halftime” with respect to the sustainable development goals (SDGs). This midline acts as an important milestone to review the progress of the SDGs and develop policies based on the most effective interventions. To estimate the remaining resources needed to achieve SDG targets for vaccines from 2023 to 2030 as well the resulting economic benefits, in this analysis, the incremental economic benefit-cost ratio (BCR) for immunization programs in 80 low- and middle-income countries targeted by the Global Vaccine Action Plan from 2023 to 2030 is calculated. Of these 80 countries, 27 are classified as low-income countries and 53 are classified as lower-middle-income countries (LMICs). The economic evaluation covers 9 vaccines employed against 10 antigens and delivered through both routine immunization programs and supplemental immunization activities. The vaccines covered in the analysis include pentavalent vaccine, human papillomavirus vaccine, Japanese encephalitis vaccine, measles vaccine, measles-rubella vaccine, meningococcal conjugate A vaccine, pneumococcal conjugate vaccine, rotavirus vaccine, and yellow fever vaccine, and correspond to the vaccines covered in the return-on-investment estimates presented in Sim et al., which covered 94 LMICs from 2011 to 2030. For these countries, we estimate program costs from the health system perspective, including vaccine costs such as costs to procure vaccines, which incorporate injection supplies and freight; and immunization delivery costs, which include nonvaccine commodity costs to deliver immunizations to target populations and incorporate labor, cold chain and storage, transportation, facilities, training, surveillance, and wastage. Economic benefits are calculated using a value of statistical life year (VSLY) approach applied to modeled cases, and deaths averted are converted into averted years of life lost using life expectancy data. BCRs are presented as the final output that compares incremental costs and benefits from the baseline of 2022 levels, assuming diminishing returns to scale. Overall, for this period, we estimate total costs of US$ 7,581,837,329.08 with VSLY benefits of US$ 762,172,371,553.54, resulting in a BCR of 100.53.

Exploring the Health and Economic Burden Among Truck Drivers in Australia: A Health Economic Modelling Study

Background The transport and logistics industry contributes to a significant proportion of the Australian economy. However, few studies have explored the economic and clinical burden attributed to poor truck driver health. We therefore estimated the work-related mortality burden among truck drivers over a 10-year period. Methods Dynamic life table modelling was used to simulate the follow-up of the Australian male working-age population (aged 15–65 years) over a 10-year period of follow-up (2021–2030). The model estimated the number of deaths occurring among the Australian working population, as well as deaths occurring for male truck drivers. Data from the Driving Health study and other published sources were used to inform work-related mortality and associated productivity loss, hospitalisations and medication costs, patient utilities and the value of statistical life year (VoSLY). All outcomes were discounted by 5% per annum. Results Over 10 years, poor truck driver health was associated with a loss of 21,173 years of life lived (discounted), or 18,294 QALYs (discounted). Healthcare costs amounted to AU$485 million (discounted) over this period. From a broader, societal perspective, a total cost of AU$2.6 billion (discounted) in lost productivity and AU$4.7 billion in lost years of life was estimated over a 10-year period. Scenario analyses supported the robustness of our findings. Conclusions The health and economic consequences of poor driver health are significant, and highlight the need for interventions to reduce the burden of work-related injury or disease for truck drivers and other transport workers.

Intensive care unit resources and patient-centred outcomes in severe COVID-19: a prospective single-centre economic evaluation.

SummaryDuring the COVID‐19 pandemic, ICU bed shortages sparked a discussion about resource allocation. We aimed to analyse the value of ICU treatment of COVID‐19 from a patient‐centred health economic perspective. We prospectively included 49 patients with severe COVID‐19 and calculated direct medical treatment costs. Quality of life was converted into aggregated quality‐adjusted life years using the statistical remaining life expectancy. Costs for non‐treatment as the comparator were estimated using the value of statistical life year approach. We used multivariable linear or logistic regression to identify predictors of treatment costs, quality of life and survival. Mean (SD) direct medical treatment costs were higher in patients in ICU with COVID‐19 compared with those without (£60,866 (£42,533) vs. £8282 (£14,870), respectively; p < 0.001). This was not solely attributable to prolonged ICU length of stay, as costs per day were also higher (£3115 (£1374) vs. £1490 (£713), respectively; p < 0.001), independent of overall disease severity. We observed a beneficial cost‐utility value of £7511 per quality‐adjusted life‐year gained, even with a more pessimistic assumption towards the remaining life expectancy. Extracorporeal membrane oxygenation therapy provided no additional quality‐adjusted life‐year benefit. Compared with non‐treatment (costs per lost life year, £106,085), ICU treatment (costs per quality‐adjusted life‐year, £7511) was economically preferable, even with a pessimistic interpretation of patient preferences for survival (sensitivity analysis of the value of statistical life year, £48,848). Length of ICU stay was a positive and extracorporeal membrane oxygenation a negative predictor for quality of life, whereas costs per day were a positive predictor for mortality. These data suggest that despite high costs, ICU treatment for severe COVID‐19 may be cost‐effective for quality‐adjusted life‐years gained.

Human and Economic Cost of Disease Burden Due to Congenital Hypothyroidism in India: Too Little, but Not Too Late.

BackgroundCongenital hypothyroidism (CH) is one of the most common preventable causes of mental retardation. Implementing newborn screening (NBS) in >52 countries enabled early detection and to initiate treatment of neonates with CH. India is yet to implement a national NBS program even though an estimated 5–15% of sick newborns suffer from genetic and metabolic disorders. Recent pilot studies confirm that the CH incidence rates range from 1 in 500 to 1 in 3,400 live births. Our objective was to estimate overall incidence rates of congenital hypothyroidism and to evaluate the costs and benefits of implementing universal NBS for CH in India.MethodsWe used the best available epidemiological and cost data to synthesize incidence rates and screening costs for CH in India. We conducted a meta-analysis of country-specific published literature and included 14 studies to calculate baseline CH incidence rates. We used two models to estimate intellectual disability in unscreened cohorts. Disability-adjusted life years (DALY) were calculated to quantify burden of disease utilizing disability weights. Direct costs including screening, confirmatory tests, and treatment costs were obtained from public and private market sources. Economic benefits were calculated from lost DALY using human capital approach and value of statistical life methods, utilizing gross national income (GNI) per capita data and value of statistical life year (VSLY), respectively. Cost discounting was used to estimate the present value of future benefits over lifetime of affected newborns.ResultsThe incidence rate of CH in India is 72 (95% CI: 58, 85) cases per 100,000 live births. Based on this data, 1 in 1,388 (95% CI: 1166, 1714) infants were diagnosed with CH in India for the year 2018. The estimated annual incidence ranged from 14,000 to 20,730 cases, and those at risk for intellectual disability ranged from 5,397 to 13,929 cases. Estimated discounted and undiscounted lost DALYs were 57,640 and 410,000, respectively. Direct annual costs for universal screening for CH in India is around USD187 million. Based on current incidence and expected severity of sequelae, economic losses ranged from USD 159 million to 1.1 billion. Benefit–cost ratios ranged from 1.8 to 6.ConclusionsUniversal NBS for CH is one of the healthcare interventions that is beneficial to prevent morbidity and cost saving. The cumulative economic benefits, derived from prevention of intellectual disability, assuming cost effectiveness threshold of three times of gross domestic product per capita, far outweigh the direct and indirect costs of screening, treatment, and surveillance throughout the life of the affected individuals. Our analysis strongly supports the argument for investing in NBS that provides good value for money and would yield substantial financial gains for the country.

Benefit-Cost Ratios of Continuing Routine Immunization During the COVID-19 Pandemic in Africa

AbstractDisruptions in routine immunization caused by COVID-19 put African countries with large vaccine-preventable disease burdens at high risk of outbreaks. Abbas et al. (2020) showed that mortality reduction from resuming immunization outweighs excess mortality from COVID-19 caused by exposure during immunization activities. We leverage these estimates to calculate benefit-cost ratios (BCRs) of disrupted immunization and apply cost of illness (COI) and value of statistical life-year (VSLY) approaches to estimate the cost of excess child deaths from eight vaccine-preventable diseases. BCRs were computed for each country, vaccine, and Expanded Program on Immunization visit. Secondary estimates that include the cost of providing immunization are presented in scenario analysis. Suspended immunization may cost $4949 million due to excess mortality using the COI approach, or $34,344 million using the VSLY approach. Likewise, excess COVID-19 deaths caused by exposure from immunization activities would cost $53 and $275 million using the COI and VSLY approaches, respectively. BCRs of continuing routine immunization are 94:1 using COI and 125:1 using VSLY, indicating that the economic costs of suspending immunization exceed that of COVID-19 deaths risked by routine immunization. When including the costs of providing routine immunization during the COVID-19 pandemic, the BCRs are 38:1 and 97:1 using the COI and VSLY approaches, respectively.

Value of statistical life year in extreme poverty: a randomized experiment of measurement methods in rural Burkina Faso

BackgroundValue of a Statistical Life Year (VSLY) provides an important economic measure of an individual’s trade-off between health risks and other consumption, and is a widely used policy parameter. Measuring VSLY is complex though, especially in low-income and low-literacy communities.MethodsUsing a large randomized experiment (N = 3027), we study methodological aspects of stated-preference elicitation with payment cards (price lists) in an extreme poverty context. In a 2 × 2 design, we systematically vary whether buying or selling prices are measured, crossed with the range of the payment card.ResultsWe find substantial effects of both the pricing method and the list range on elicited VSLY. Estimates of the gross domestic product per capita multiplier for VSLY range from 3.5 to 33.5 depending on the study design. Importantly, all estimates are economically and statistically significantly larger than the current World Health Organization threshold of 3.0 for cost-effectiveness analyses.ConclusionsOur results inform design choice in VSLY measurements, and provide insight into the potential variability of these measurements and possibly robustness checks.

Cost burden and cost-effective analysis of the nationwide implementation of the Quality in Acute Stroke Care protocol in Australia

Abstract Background The Quality in Acute Stroke Care (QASC) protocol is a multidisciplinary approach to implement evidence-based treatment after acute stroke that reduces death and disability. Aim This study sought to evaluate the cost-effectiveness of implementing the QASC protocol across Australia, from a healthcare and a societal perspective. Methods A decision-analytic model was constructed to reflect one-year outcomes post-stroke, aligned with the stroke severity categories of the modified Rankin scale (mRS). Decision analysis compared outcomes following implementation of the QASC protocol versus no implementation. Population data were extracted from Australian databases and data inputs regarding stroke incidence, costs, and utilities were drawn from published sources. The analysis assumed a progressive uptake and efficacy of the QASC protocol over five years. Health benefits and costs were discounted by 5% annually. The cost of each year lived by an Australian, from a societal perspective, was based on the Australian Government's “value of statistical life year” (AUD 213,000). Results Over five years, the model predicted 263,722 strokes among the Australian population. The implementation of the QASC protocol was predicted to prevent 1,154 deaths and yield a gain of 876 years of life (0.003 per stroke), and 3,180 quality-adjusted life years (QALYs) (0.012 per stroke). There was an estimated net saving of AUD 65.2 million in healthcare costs (AUD 247 per stroke) and AUD 251.7 million in societal costs (AUD 955 per stroke). Conclusions Implementation of the QASC protocol in Australia represents both a dominant (cost-saving) strategy, from a healthcare and a societal perspective. Funding Acknowledgement Type of funding sources: None. Decision treePSA

Cost-Effectiveness of Empagliflozin and Metformin Combination Versus Standard Care as First-Line Therapy in Patients With Type 2 Diabetes Mellitus

ObjectiveSodium-glucose cotransporter 2 inhibitors have been shown to reduce cardiovascular events but are currently not used as the first-line therapy. This study was conducted to evaluate the cost-effectiveness of first-line empagliflozin plus metformin versus metformin monotherapy among Australians with type 2 diabetes mellitus (T2DM) and existing cardiovascular disease (CVD). MethodsA Markov model with 1-year cycles and a 5-year time horizon was constructed to simulate the occurrence of recurrent cardiovascular events among Australians aged 50 to 84 years with T2DM and CVD. Efficacy results were derived from the Empagliflozin Cardiovascular Outcome Event Trial in Type 2 Diabetes Mellitus Patients-Removing Excess Glucose trial. Costs and utilities were drawn from published sources. The evaluation adopted both health care and societal perspectives, with the latter ascribing the Australian government’s “value of statistical life year” (A$213 000) to each year lived by a person. Future outcomes were discounted at 5% annually. Sensitivity analyses were conducted to enhance the robustness of conclusions. ResultsCompared with metformin monotherapy, first-line empagliflozin plus metformin reduced overall cardiovascular events by 0.82% and overall deaths by 7.72% over 5 years. There were 0.2 years of life saved per person and 0.16 quality-adjusted life years gained, at a net health care cost of A$4408. These equated to incremental cost-effectiveness ratios of A$22 076 per year of life saved and A$28 244 per quality-adjusted life year gained. The gains in the value of statistical life year equated to A$42 530 per person, meaning that from a societal perspective, the intervention was cost-saving. ConclusionFirst-line empagliflozin plus metformin may represent a cost-effective strategy for the management of T2DM and CVD in Australia.

Cost Burden and Cost-Effective Analysis of the Nationwide Implementation of the Quality in Acute Stroke Care Protocol in Australia

ObjectivesThe Quality in Acute Stroke Care (QASC) protocol is a multidisciplinary approach to implement evidence-based treatment after acute stroke that reduces death and disability. This study sought to evaluate the cost-effectiveness of implementing the QASC protocol across Australia, from a healthcare and a societal perspective. Materials and MethodsA decision-analytic model was constructed to reflect one-year outcomes post-stroke, aligned with the stroke severity categories of the modified Rankin scale (mRS). Decision analysis compared outcomes following implementation of the QASC protocol versus no implementation. Population data were extracted from Australian databases and data inputs regarding stroke incidence, costs, and utilities were drawn from published sources. The analysis assumed a progressive uptake and efficacy of the QASC protocol over five years. Health benefits and costs were discounted by 5% annually. The cost of each year lived by an Australian, from a societal perspective, was based on the Australian Government's ‘value of statistical life year’ (AUD 213,000). ResultsOver five years, the model predicted 263,722 strokes among the Australian population. The implementation of the QASC protocol was predicted to prevent 1,154 deaths and yield a gain of 876 years of life (0.003 per stroke), and 3,180 quality-adjusted life years (QALYs) (0.012 per stroke). There was an estimated net saving of AUD 65.2 million in healthcare costs (AUD 247 per stroke) and AUD 251.7 million in societal costs (AUD 955 per stroke). ConclusionsImplementation of the QASC protocol in Australia represents both a dominant (cost-saving) strategy, from a healthcare and a societal perspective.

Economic Value of Life in Iran: The Human Capital Approach.

Background:The human life value is among the most important challenges of the health economic evaluation. This limitation has reduced the feasibility of applying the cost-benefit method in evaluations of health interventions and policies. Using the human capital approach and discounted value of future earnings, the present study calculated the human capital of different age groups.Methods:The required data were obtained using “income and expenditures of Iranian households” data in 2015 from the Statistical Center of Iran, which included the information on 19380 urban households.Results:According to the calculation of human capital, the maximum value of a statistical life year in the high-income group was related to the age group of 30–34 yr old (223,286 US$ equals to 9378 million Iranian Rials). The lowest value in all three groups of high, medium and low income is related to the age group of 85 and older. In addition, the economic value of statistical life year for men has been calculated as higher than that of women, however, in older age groups, the human capital of both genders have been converging.Conclusion:The economic value of life for young people aged between 20 to 30 yr was higher than other demographic groups. The findings of the research help to provide a more accurate base for the cost-benefit analysis of health and social policies. Considering the economic value of the statistical life for different age groups may change policy priorities in areas related to health and life of human beings.

Economic Benefits of Immunization for 10 Pathogens in 94 Low- and Middle-Income Countries From 2011 to 2030 Using Cost-of-Illness and Value-of-Statistical-Life Approaches

ObjectivesVaccination has prevented millions of deaths and cases of disease in low- and middle-income countries (LMICs). During the Decade of Vaccines (2011-2020), international organizations, including the World Health Organization and Gavi, the Vaccine Alliance, focused on new vaccine introduction and expanded coverage of existing vaccines. As Gavi, other organizations, and country governments look to the future, we aimed to estimate the economic benefits of immunization programs made from 2011 to 2020 and potential gains in the future decade. MethodsWe used estimates of cases and deaths averted by vaccines against 10 pathogens in 94 LMICs to estimate the economic value of immunization. We applied 3 approaches—cost of illness averted (COI), value of statistical life (VSL), and value of statistical life-year (VSLY)—to estimate observable and unobservable economic benefits between 2011 and 2030. ResultsFrom 2011 to 2030, immunization would avert $1510.4 billion ($674.3-$2643.2 billion) (2018 USD) in costs of illness in the 94 modeled countries, compared with the counterfactual of no vaccination. Using the VSL approach, immunization would generate $3436.7 billion ($1615.8-$5657.2 billion) in benefits. Applying the VSLY approach, $5662.7 billion ($2547.2-$9719.4) in benefits would be generated. ConclusionVaccination has generated significant economic benefits in LMICs in the past decade. To reach predicted levels of economic benefits, countries and international donor organizations need to meet coverage projections outlined in the Gavi Operational Forecast. Estimates generated using the COI, VSL, or VSLY approach may be strategically used by donor agencies, decision makers, and advocates to inform investment cases and advocacy campaigns.

The Global Macroeconomic Burden of Breast Cancer: Implications for Oncologic Surgery.

In this study, we quantified the global macroeconomic burden of breast cancer to underscore the critical importance of improving access to oncologic surgical care internationally. Breast cancer mortality in many low and middle-income countries (LMICs) is dramatically higher than in high-income countries. Prior to identifying solutions, however, it is important to first define the burden of disease. Data from the Institute of Health Metrics and Evaluation (2005-2015) were used to assess epidemiologic trends for 194, middle, and low-income countries. Economic burden defined by Welfare Loss (WL) was calculated by measuring disability-adjusted-life-years lost to breast cancer alongside the dollar equivalent of a value of statistical life year and as a function of each country's gross domestic product (GDP). Annual mortality rates among breast cancer patients were significantly greater in LMICs in South Asia (3.06 per 100 women) and Sub-Saharan Africa (2.76 per 100 women), compared with high-income countries like the United States (1.69 per 100 women). From 2005-2015, mortality in South Asia increased by 8.20% and decreased by 6.45% in Sub-Saharan Africa; mortality rates in 2015 were observed as 27.9 per 100,000 in South Asia and 18.61 per 100,000 in Sub-Saharan Africa. Countries in South Asia demonstrated the greatest rise in WL due to breast cancer, from 0.05% to 0.08% of GDP. The burden of disease and economic impact of breast cancer is intensifying in LMICs. Global efforts to improve access to surgical care for women with breast cancer could reduce mortality and mitigate the social and financial impact of this disease in LMICs.

Cost- Effectiveness of Mammography Screening Program in a Resource-Limited Post-Soviet Country of Kazakhstan.

Objectives:To conduct cost effectiveness and benefit-cost analyses of the organized mammography-screening program in the Republic of Kazakhstan comparing women who developed breast cancer in screened and unscreened scenario. Methods:389,352 screened women were included in the study. Among these, 895 women were further diagnosed with breast cancer. Outcomes measures include life years saved, quality-adjusted life years, incremental cost-effectiveness ratio, and value of statistical life year. Sensitivity analyses were performed to assess uncertainty.Results:Compared to no screening scenario, an organized mammography yielded an additional 1,253 life years and 790 quality-adjusted life years in 2016. The incremental cost-effectiveness ratio was equal to 3,157 USD per one QALY saved, which is two times less than the GDP per capita in Kazakhstan in 2016. Sensitivity analysis showed that the mammography remains cost-effective in the majority of the scenarios. Conclusion:Mammography screening in Kazakhstan was found to be highly cost-effective, associated with treatment cost savings, and can be an efficient use of limited resources in Kazakhstan.

Comparing the Application of CEA and BCA to Tuberculosis Control Interventions in South Africa

Achieving ambitious targets to address the global tuberculosis (TB) epidemic requires consideration of the impact of competing interventions for improved identification of patients with TB. Cost-effectiveness analysis (CEA) and benefit-cost analysis (BCA) are two approaches to economic evaluation that assess the costs and effects of competing alternatives. However, the differing theoretical basis and methodological approach to CEA and BCA is likely to result in alternative analytical outputs and potentially different policy interpretations. A BCA was conducted by converting an existing CEA on various combinations of TB control interventions in South Africa using a benefits transfer approach to estimate the value of statistical life (VSL) and value of statistical life year (VSLY). All combinations of interventions reduced untreated active disease compared to current TB control, reducing deaths by between 5,000 and 75,000 and resulting in net benefits of Int$3.2–Int$137 billion (ZAR18.1 billion to ZAR764 billion) over a 20-year period. This analysis contributes to development and application of BCA methods for health interventions and demonstrates that further investment in TB control in South Africa is expected to yield significant benefits. Further work is required to guide the appropriate analytical approach, interpretation and policy recommendations in the South African policy perspective and context.

Evaluating the health costs of oral hexavalent chromium exposure from water pollution: A case study in Taiwan

The Wu river watershed between Taichung City and Changhua County in Taiwan has become polluted with heavy metals. The present study established a method to evaluate the health costs, including the loss of life expectancy (LLE) and medical expenditure, associated with oral exposure to Cr(VI) contamination of the water in this area. The observed differences in Cr(VI) contamination of the drinking water, soil, and crops (mainly rice) were largely due to the levels of Cr(VI) contamination in the rivers. The high level of Cr(VI) contamination in Changhua County was associated with a 60-fold increase in the rate of gastric cancer relative to that in Taichung City. LLE values of US$1337 million/year and US$1162 million/year, similar to other values associated with wastewater exposure, were obtained using the value of statistical life-year (VSLY) and value of statistical life (VSL) methods, respectively. However, the total medical costs associated with Cr(VI) contamination (US$6.45 million/year) were much lower than the LLE values and could thus be ignored. Drinking water had a lower level of Cr(VI) contamination relative to rice, and therefore had much lower associated total health costs (US$0.863 million/year vs. US$1169–1343 million/year). In conclusion, our study provides residents, workers, and government agencies with a comprehensive evaluation and important information regarding Cr(VI) contamination in polluted water, and results that can be applied to governmental cost-benefit analysis policies and measurements.

VP95 The Monetary Value Of A Statistical Life Year: A Systematic Review

INTRODUCTION:Among economists, there is widespread agreement that the monetary valuation of health gains should reflect the preferences of those who will be affected by resource allocation decisions. In the context of Health Technology Assessments (HTAs), this view implies a need for reliable empirical estimates of the value of statistical life year (VSLY), which should provide a useful point of reference for cost benefit analyses.METHODS:We conducted a systematic review of the literature on the economic value of a statistical life (VSL). We searched in the EconBiz and EconLit databases for studies, which reported VSL estimates based on original research and were published between 1995 and 2015. We classified studies by methodology, that is, revealed preference (RP) or stated preference (SP; that is, CV, contingent valuation, or DCE (discrete choice experiment) approach, and by regional origin of data. We transformed VSL estimates into VSLY expressed in year 2014 Euros, using life expectancy tables for the populations studied, a real discount rate of 3 percent, national Consumer Price Indices for inflating, and purchasing power parities for currency conversion. In addition, we calculated ratios of VSLY to gross domestic product (GDP) per capita.RESULTS:Our search yielded 120 studies appropriate for inclusion. From these, we extracted a total of 132 VSL estimates (RP, n = 60; SP, n = 72). The median VSLY was 6.4 times GDP/capita. Transformed into Euro (2014), the median VSLY was EUR165,000 (mean, EUR217,000). We found significant differences by regional source of data (North American, median EUR272,000; European, EUR158,000) and by method (RP, EUR241,000; SP: CV, EUR117,000; DCE, EUR187,000). VSLY estimates were sensitive to discount rate.CONCLUSIONS:Our data indicate that VSLY estimates based on empirical data exceed benchmarks commonly used in the context of HTAs. However, inter-study variability, methodological limitations, and normative considerations, all suggest to exercise caution before translating this observation into actual policy.

Policy Challenges of the Heterogeneity of the Value of Statistical Life

Economic research has developed estimates of the heterogeneity of the value of statistical life (VSL) on dimensions such as individual age, income, immigrant status, and the nature of the risk exposure. This paper examines the empirical evidence on the heterogeneity of VSL and explores the potential implications for the valuation of regulatory policies. EPA unsuccessfully sought to adopt age variations in VSL based on survey evidence. However, labor market estimates of VSL indicate a pattern that tracks lifetime consumption trajectories, as the VSL rises with age and eventually tapers off but does not plummet with age. The VSL has an income elasticity of at least 0.5. The analysis of age variations in VSL is accompanied by a review of the value of statistical life year (VSLY) approach. The U.S. Department of Transportation recognizes the influence of a positive income elasticity of VSL, and EPA has proposed adopting a 50% cancer premium. Recent studies suggest that the risk of death from terrorist attacks are of particular concern and may merit a substantial premium in benefit assessments. Whether and how such heterogeneity in VSL should be incorporated in regulatory policy evaluations depends in part on the source of the heterogeneity. Some prominent sources of heterogeneity arise from segmented labor markets in which disadvantaged groups face different labor market opportunities. Blacks and Mexican immigrants face quite different labor market offer curves. As a result, influences that are problematic from the standpoint of setting different benefit levels for policy purposes are differences in VSL by race and immigrant status. The paper also examines the EPA’s recent devaluation of life and the Posner-Sunstein proposal to use VSL estimates to set hedonic damages in tort liability cases. The Posner-Sunstein proposal would lead to excessive levels of compensatory damages and would greatly increase damages amounts.

Policy Challenges of the Heterogeneity of the Value of Statistical Life

Economic research has developed estimates of the heterogeneity of the value of statistical life (VSL) on dimensions such as individual age, income, immigrant status, and the nature of the risk exposure. This paper examines the empirical evidence on the heterogeneity of VSL and explores the potential implications for the valuation of regulatory policies. Previously, the U.S. Environmental Protection Agency (EPA) unsuccessfully sought to adopt a simple age discount percentage for VSL based on survey evidence. However, labor market estimates of VSL indicate a pattern that tracks lifetime consumption trajectories, as the VSL rises with age and eventually tapers off but does not plummet with age. The VSL has an income elasticity of at least 0.5. The analysis of age variations in VSL is accompanied by a review of the value of statistical life year (VSLY) approach. The U.S. Department of Transportation recognizes the influence of a positive income elasticity of VSL, and EPA has proposed adopting a 50% cancer premium. Recent studies suggest that the risk of death from terrorist attacks are of particular concern and may merit a substantial premium in benefit assessments. Whether and how such heterogeneity in VSL should be incorporated in regulatory policy evaluations depends in part on the source of the heterogeneity. Some prominent sources of heterogeneity arise from segmented labor markets in which disadvantaged groups face different labor market opportunities. Blacks and Mexican immigrants face quite different labor market offer curves. As a result, influences that are problematic from the standpoint of setting different benefit levels for policy purposes are differences in VSL by race and immigrant status. The paper also examines the EPA's recent devaluation of life and the Posner–Sunstein proposal to use VSL estimates to set hedonic damages in tort liability cases. As with hedonic damages generally, adoption of their proposal would lead to excessive levels of compensatory damages and would greatly increase damage amounts.

Mortality-risk Valuation and Age: Stated Preference Evidence

Controversy over the value of statistical life (VSL) centers on whether a single value should be applied to all age groups, as currently done by US government agencies, or whether lower values should be used for the elderly, recognizing that their life expectancies are shorter than those of younger people. Surveys of different age groups' willingness to pay (WTP) for mortality-risk reductions can potentially help resolve this issue.This paper reports on an analysis of this survey literature. Of some 36 studies reviewed, the literature is split on whether older people have a lower WTP for mortality-risk reductions. Even among the studies that find such a discount, its size varies widely. A simple statistical analysis of this literature reveals that larger samples and samples with a higher fraction of older people are significantly associated with finding this effect, suggesting that conducting a larger, more thorough study may help resolve this issue. The paper also raises the possibility that the WTP estimated when all factors related to age are allowed to vary may be more useful to policy than the WTP estimated when all such factors are held constant. A clear finding is that there is no evidence to support use of a uniform value of statistical life year.