Policymakers regularly face the challenge of making decisions that affect people’s risk of death. For example, setting stricter vehicle fuel efficiency standards may lead to higher costs for consumers and businesses but at the same time save lives through improved air quality in urban areas, thus creating a trade-off between economic costs and the value of saving lives. Too often, these economic trade-offs are not assessed in a systematic manner using a consistent methodology. This report aims to equip policy makers with the valuation methodologies and economic valuations necessary to assess economic benefits of avoided fatalities, also known as the “Value of a Statistical Life” (VSL).
The VSL represents the value a given population places on avoiding the death of an unidentified individual, such as reducing the number of deaths from air pollution. In 2012, the OECD published Mortality Risk Valuation in Environment, Health and Transport Policies, which provided a comprehensive assessment of VSL based on meta-analysis and also offered recommendations for how VSL estimates could be used in policy analysis and how they may be transferred among countries and over time.
While OECD’s 2012 report has become a standard reference for many cost-benefit practitioners, scientific methods have progressed, new data have become available and an update is therefore timely. In the last decade alone, the number of completed VSL studies globally has nearly doubled while during this period there have also not been any new comprehensive global reviews or meta-analyses published of comparable scope and aim to OECD’s 2012 work. This updated report entitled Mortality Risk Valuation in Policy Assessment: A Global Meta-Analysis of Value of Statistical Life Studies fills this gap and provides a comprehensive update based on the latest methodological developments and data.
The value of statistical life estimates presented in this report are expected to be widely applicable in cost-benefit analyses and other assessments of policies and projects, covering any area where there is a need to monetise mortality risk effects and compare them against the costs of such initiatives. The estimates can also be used to assess indirect positive or negative mortality impacts of other polices.
Considering the heterogeneity of the meta data supporting this report, there are advantages to adopting simple, general guidelines that are applicable to most cost-benefit analyses and other assessments involving mortality risks. Thus, the recommended easy-to-use, transparent and consistent base VSL values that are presented in this report will contribute to an improved and common understanding of the marginal benefits (or costs) of public policies that affect mortality risks across sectors, at least within and between similar countries.