Measuring the economic value of the effects of chemicals on ecological systems and human health

This paper reviews and discusses the existing methods for placing a value on the effects of chemicals on human health and the environment. It surveys both methods and non-market methods, discussing their advantage and limitations. For example, when valuing non-fatal illnesses, the cost-of-illness approaches captures labour income lost to illness and medical expenditures undertaken to mitigate the illness, but fails to account for the value of the disutility of the illnesses. The paper also discusses mortality risk valuation, and the widely used metric termed the Value of a Statistical Life, the difficulties associated with estimating it, and the appropriateness of any adjustments for futurity, age, and the nature of the risk itself. Finally, the paper takes up the issue whether the source of the health risks (e.g., chemicals versus other forms of pollution versus others) affects how much the public values reducing those risks.