Download 20.05 Summary, biography and suggested readings

The value of a statistical life
Name:
James Hammitt
Title, organisation:
Professor, Harvard School of Public Health
E-mail/phone:
[email protected], 617 432 4343
Summary:
The value per statistical life
The monetary value of a change in mortality risk is described as the value per statistical life (VSL). VSL is the marginal rate
of substitution between mortality risk in a specified time period and wealth. It may vary between individuals and depend on
many factors, including the period over which risk is changed, baseline risk, wealth, age, life expectancy, future health, the
cause of mortality (e.g., fatal injury, cancer), and the source of the hazard (e.g., motor-vehicle crash, nuclear power plant).
Estimates are based on preferences revealed through market behavior (e.g., choice among jobs differing in occupational
fatality risk) and stated-preference studies. Estimates of the income elasticity, important for projecting the value of future
mortality-risk changes, vary by source. Cross-sectional comparisons within a country suggest values on the order of 0.5 to 1.0
but comparisons between higher and lower income countries, within a country over time, and values derived from estimates of
financial risk aversion suggest values of 1.0 or larger.
Biography:
James K. Hammitt is professor of economics and decision sciences at Harvard University (School of Public Health), director
of the Harvard Center for Risk Analysis, and at the Toulouse School of Economics (LERNA-INRA). His research and
teaching concern the development and application of quantitative methods—including benefit-cost, decision, and risk
analysis—to health and environmental policy. He holds advanced degrees in applied mathematics and public policy from
Harvard, was senior mathematician at RAND, and held the Pierre-de-Fermat chair at the Toulouse School of Economics. He
is a member of the US Environmental Protection Agency Science Advisory Board and chaired the Advisory Council on Clean
Air Compliance Analysis.
Suggested
readings:
Hammitt, J.K., “Valuing Mortality Risk: Theory and Practice,” Environmental Science and Technology 34: 1396-1400, 2000.
Hammitt, J.K., and L.A. Robinson, “The Income Elasticity of the Value per Statistical Life: Transferring Estimates Between
High and Low Income Populations,” Journal of Benefit-Cost Analysis 2(1): Article 1, DOI: 10.2202/21522812.1009, 2011.
Viscusi, W.K., and J.E. Aldy, “The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the
World,” Journal of Risk and Uncertainty 27: 5-76, 2003.
Kochi, I., B. Hubbell, and R. Kramer, “An Empirical Bayes Approach to Combining and Comparing Estimates of the Value
of a Statistical Life for Environmental Policy Analysis,” Environmental and Resource Economics 34: 385-406,
2006.