The Value of Statistical Life (VSL) reflects the monetary value to the affected population of a small reduction in the risk of premature death. It is primarily used as an input to the cost-benefit analysis of safety programmes. For a number of reasons, governments generally apply the same VSL across contexts. The exception is when the change in risk applies to cancer fatalities, as exemplified by the UK HSE’s current recommendation:
‘Where the benefit is the prevention of death, the current convention used by HSE, when conducting a CBA is to adopt a benchmark value of about £1,000,000 (2001 prices) for the value of preventing a fatality (VPF) . This is the VPF adopted by the Department of Transport, Local Government and the Regions for the appraisal of road safety measures. ......Currently, HSE takes the view that it is only in the case where death is caused by cancer that people are prepared to pay a premium for the benefit of preventing a fatality and has accordingly adopted a VPF (VSL) twice that of the roads benchmark figure. Research is planned to assess the validity of this approach.’ (HSE, 2001).
This presentation reports the outcome of the subsequent, recently completed research exploring public values for these mortality risk reductions. Results suggest the absence of a cancer premium, at least for the class of cancers considered.
About Prof Susan Chilton
Sue Chilton is Professor of Economics at Newcastle University Business School (UK). Her main interests centre around methodological issues associated with the use of stated preference methods to elicit economic preferences, experimental economics and decision making under risk and uncertainty. She is Director of the Economics of Safety, Health, Environment and Risk (ESHER) Research Group in the Business School and much of their research is commissioned by public sector bodies such as the Department of the Environment, Food and Rural Affairs (DEFRA), the UK Health and Safety Executive (HSE) and the Environment Agency. A number of articles stemming directly from such research have appeared in Journals such as the Journal of Risk and Uncertainty and the Journal of Environmental Economics and Management. She recently held a Research Fellowship as part of the ESRC Sustainable Practices Research Group (coordinator: University of Manchester) focussing on inducing behavioural change and coordinated a Valuing Nature Network project on Marine Governance.
Note: Papers, presentation slides and any other material provided by the Guest Lecturer will be made available some time after the lecture at Publications > Media & Speeches > Guest Lectures by Visiting Academics.