Mortality Risk Valuation in Policy Assessment

Annex B. USD₂₀₂₂ conversion procedure for VSL and GDP

Conversion procedure for VSL (aligned with the OECD 2012 Study):

All VSL estimates included in the meta database were converted to 2022 USD, using inflation data and PPP currency exchange rates data from the OECD National Accounts statistics. If VSL estimates from a non-U.S. country were expressed (only) in USD instead of the relevant national currency, estimates are first converted back to the national currency, using the exchange rates indicated in the article, and then adjusted for inflation and converted back to 2022 USD as described above. The conversion formula for the currency/country $i$ in year $t$ is:

Equation A ‎B.1

${VSL}_{2022,Int\$}={VSL}_{t, i}\times \frac{{CPI}_{2022,i}}{{CPI}_{t, i}}\times \frac{{PPP}_{2022,Int\$}}{{PPP}_{2022,i}}$

About 30 non-US studies reported their VSL estimates in USD, and four non-EUR country studies reported their VSL estimates in EUR. For these studies, estimates are first converted back to the national currency, using the exchange rates indicated in the article, and then adjusted for inflation and converted back to 2022 USD as described above. For three studies that reported single VSL estimates from four countries, the average CPI of four countries for adjusting inflation is used.

Procedure for GDP

The conversion process of GDP per capita – used as a proxy for income in the country in which a VSL study has been conducted – follows the same formula as for VSL. First, the nominal GDP of the country - in national currency and from the same year of the VSL study - is divided by the population of the country in that same year to calculate a GDP per capita figure for the country. Then, this GDP per capita figure is adjusted to 2022 price level using national CPI and then converted to international dollars using PPP exchange rates. Note that whether Gross National Income (GNI) or GDP is used as a proxy measure is not important as these two measures follow each other very closely1.

Note

← 1.  GNI measures the total income earned by residents of a country, including income earned abroad, while GDP instead counts only income generated from goods and services produced domestically. These two measures follow each other very closely (see, for example, GNI per capita vs. GDP per capita, 2022).