Monetary values of increasing life expectancy: Sensitivity to shifts of the survival curve.

Individuals' monetary values of decreases in mortality risk depend on the magnitude and timing of the risk reduction. We elicited stated preferences among three time paths of risk reduction yielding the same increase in life expectancy (decreasing risk for the next decade, subtracting a constant from or multiplying risk by a constant in all future years) and willingness to pay (WTP) for risk reductions differing in timing and life-expectancy gain. Respondents exhibited heterogeneous preferences over the alternative time paths, with almost 90 percent reporting transitive orderings. WTP is statistically significantly associated with life-expectancy gain (between about 7 and 28 days) and with respondents' stated preferences over the alternative time paths. Estimated value per statistical life year (VSLY) can differ by time path and averages about $500,000, roughly consistent with conventional estimates obtained by dividing estimated value per statistical life by discounted life expectancy.

Consistent valuation of a reduction in mortality risk using values per life, life year, and quality-adjusted life year.

The monetary value of a reduction in mortality risk can be accurately characterized using the alternative concepts of value per statistical life (VSL), value per statistical life year (VSLY), and value per quality-adjusted life year (VQALY). Typically, each of these values depends on the age and other characteristics of the affected individual; at most one of the values can be independent of age. The common practice of valuing a transient or persistent risk reduction using a constant VSL, VSLY, or VQALY yields systematic differences in the calculated monetary value that depend on the age at which the risk reduction begins, its duration, time path, and whether future lives, life years, or quality-adjusted life years are discounted. Mutually consistent, age-dependent VSL, VSLY, and VQALY are derived and the large differences in valuation of illustrative transient and persistent risk reductions that can result from assuming age-independent values of each of the three concepts are illustrated.

Reappraising the public health benefits conferred by environmental policy: Considerations for an aging society.

Although addressing environmental pollution and unprecedented societal aging are concurrent public health challenges, rarely is the relationship between the two considered. Current approaches to valuing the public health benefits conferred by environmental policy may be ill-suited to aging populations. We describe the limitations of the age-invariant approach used by the United States Environmental Protection Agency to estimate the public health benefits corresponding to environmental regulation. These include the poor age-representativeness of the samples informing the valuation of mortality risk reduction, the exclusion of age-related outcomes from valuation, and the omission of age-related third-party expenditures. We offer an empirical framework that could address these limitations. Our recommendations could improve the calibration of environmental regulatory analysis to the changing age distribution of the United States population.

Valuing COVID-19 Morbidity Risk Reductions.

Many economic analyses, including those that address the COVID-19 pandemic, focus on the value of averting deaths and do not include the value of averting nonfatal illnesses. Yet incorporating the value of averting nonfatal cases may change conclusions about the desirability of the policy. While per case values may be small, the number of nonfatal cases is often large, far outstripping the number of fatal cases. The value of averting nonfatal cases is also increasingly important in evaluating COVID-19 policy options as vaccine- and infection-related immunity and treatments reduce the case-fatality rate. Unfortunately, little valuation research is available that explicitly addresses COVID-19 morbidity. We describe and implement an approach for approximating the value of averting nonfatal illnesses or injuries and apply it to COVID-19 in the United States. We estimate gains from averting COVID-19 morbidity of about 0.01 quality-adjusted life year (QALY) per mild case averted, 0.02 QALY per severe case, and 3.15 QALYs per critical case. These gains translate into monetary values of about $5,300 per mild case, $11,000 per severe case, and $1.8 million per critical case. While these estimates are imprecise, they suggest the magnitude of the effects.

Prevention, treatment, and palliative care: The relative value of health improvements under alternative evaluation frameworks.

The social value of decreasing health risks can be evaluated using benefit-cost analysis (BCA), cost-effectiveness analysis (CEA), or a social-welfare function (SWF). These frameworks can produce different social preference rankings of interventions depending on how their health effects and costs are distributed in a population. This paper derives social values of marginal decreases in the probability of illness, its severity (decrease in health status), lethality (conditional mortality risk), and cost under BCA, CEA, and three benchmark SWFs: utilitarian, ex ante prioritarian, and ex post prioritarian. The sensitivity of the social values of improvements in health and decreases in cost to individual circumstances are diverse. In contrast, the conditions under which a decrease in risk, severity, or lethality is socially preferred to a decrease in another of these dimensions are identical for BCA, CEA, the utilitarian and ex ante prioritarian SWFs, but can differ for the ex post prioritarian SWF.

Valuing non-marginal changes in mortality and morbidity risk.

Many stated-preference studies that seek to estimate the marginal willingness-to-pay (WTP) for reductions in mortality or morbidity risk suffer from inadequate scope sensitivity. One possible reason is that the risk reductions presented to respondents are too small to be meaningful. Survey responses may thus not accurately reflect respondents preferences for health and safety. In this paper we propose a novel approach to estimating the value per statistical life (VSL) or the value per statistical case (VSC) based on larger risk reductions measurable as percent changes. While such non-marginal risk reductions are easier to understand, they introduce well known biases. We propose a methodology to de-bias VSL and VSC estimates derived from the evaluation of non-marginal risk reductions and present a proof of concept using simulated stated preference data.

Health benefits of decreases in on-road transportation emissions in the United States from 2008 to 2017.

Decades of air pollution regulation have yielded enormous benefits in the United States, but vehicle emissions remain a climate and public health issue. Studies have quantified the vehicle-related fine particulate matter (PM2.5)-attributable mortality but lack the combination of proper counterfactual scenarios, latest epidemiological evidence, and detailed spatial resolution; all needed to assess the benefits of recent emission reductions. We use this combination to assess PM2.5-attributable health benefits and also assess the climate benefits of on-road emission reductions between 2008 and 2017. We estimate total benefits of $270 (190 to 480) billion in 2017. Vehicle-related PM2.5-attributable deaths decreased from 27,700 in 2008 to 19,800 in 2017; however, had per-mile emission factors remained at 2008 levels, 48,200 deaths would have occurred in 2017. The 74% increase from 27,700 to 48,200 PM2.5-attributable deaths with the same emission factors is due to lower baseline PM2.5 concentrations (+26%), more vehicle miles and fleet composition changes (+22%), higher baseline mortality (+13%), and interactions among these (+12%). Climate benefits were small (3 to 19% of the total). The percent reductions in emissions and PM2.5-attributable deaths were similar despite an opportunity to achieve disproportionately large health benefits by reducing high-impact emissions of passenger light-duty vehicles in urban areas. Increasingly large vehicles and an aging population, increasing mortality, suggest large health benefits in urban areas require more stringent policies. Local policies can be effective because high-impact primary PM2.5 and NH3 emissions disperse little outside metropolitan areas. Complementary national-level policies for NOx are merited because of its substantial impacts-with little spatial variability-and dispersion across states and metropolitan areas.

The Modest Effects of Fact Boxes on Cancer Screening.

As health care becomes increasingly personalized to the needs and values of individual patients, informational interventions that aim to inform and debias consumer decision-making are likely to become important tools. In a randomized controlled experiment, we explore the effects of providing participants with published fact boxes on the benefits and harms of common cancer screening procedures. Female participants were surveyed about breast cancer screening by mammography, while male participants were surveyed about prostate cancer screening by prostate-specific antigen (PSA) testing. For these screening procedures, we expect consumers to have overly optimistic prior beliefs about the benefits and harms. We find that participants update their beliefs about the net benefits of screening modestly, but we observe little change in their stated preferences to seek screening. Participants who scored higher on a numeracy test updated their beliefs about screening benefits more in response to the fact boxes than did participants who scored lower on the numeracy test.

Introduction to Special Issue on Risk Assessment, Economic Evaluation, and Decisions.

Integrating risk assessment, economic evaluation, and uncertainty to inform policy decisions is a core challenge to risk analysis. In September 2019, the Harvard Center for Risk Analysis, with support from the Society for Risk Analysis Economics and Benefits Analysis Specialty Group and others, convened a workshop to address this issue. The workshop built in part on the recommendations of the 2009 National Research Council report, Science and Decisions: Advancing Risk Assessment. It honored John S. Evans, whose thoughtful and innovative teaching and scholarship have significantly advanced thinking on these issues. This special issue features a profile of Dr. Evans and nine articles that build on work presented at the workshop.

Fair innings? The utilitarian and prioritarian value of risk reduction over a whole lifetime.

The social value of risk reduction (SVRR) is the marginal social value of reducing an individual's fatality risk, as measured by some social welfare function (SWF). This Article investigates SVRR, using a lifetime utility model in which individuals are differentiated by age, lifetime income profile, and lifetime risk profile. We consider both the utilitarian SWF and a "prioritarian" SWF, which applies a strictly increasing and strictly concave transformation to individual utility. We show that the prioritarian SVRR provides a rigorous basis in economic theory for the "fair innings" concept, proposed in the public health literature: as between an older individual and a similarly situated younger individual (one with the same income and risk profile), a risk reduction for the younger individual is accorded greater social weight even if the gains to expected lifetime utility are equal. The comparative statics of prioritarian and utilitarian SVRRs with respect to age, and to (past, present, and future) income and baseline survival probability, are significantly different from the conventional value per statistical life (VSL). Our empirical simulation based upon the U.S. population survival curve and income distribution shows that prioritarian SVRRs with a moderate degree of concavity in the transformation function conform to widely held views regarding lifesaving policies: the young should take priority but income should make no difference.

Mortality Benefits and Control Costs of Improving Air Quality in Mexico City: The Case of Heavy Duty Diesel Vehicles.

Diesel vehicles are significant contributors to air pollution in Mexico City. We estimate the costs and mortality benefits of retrofitting heavy-duty vehicles with particulate filters and oxidation catalysts. The feasibility and cost-effectiveness of controls differ by vehicle model-year and type. We evaluate 1985 to 2014 model-year vehicles from 10 vehicle classes and five model-year groups. Our analysis shows that retrofitting all vehicles with the control that maximizes expected net benefits for that vehicle type and model-year group has the potential to reduce emissions of primary fine particles (PM2.5 ) by 950 metric tons/year; cut the population-weighted annual mean concentration of PM2.5 in Mexico City by 0.90 µg/m3 ; reduce the annual number of deaths attributable to air pollution by over 80; and generate expected annual health benefits of close to 250 million US$. These benefits outweigh expected costs of 92 million US$ per year. Diesel retrofits are but one step that should viewed in the context of other efforts--such as development of an integrated public transportation system, promotion of the rational use of cars, reduction of emissions from industrial sources and fires, and redesign of the Mexico City Metropolitan Area to reduce urban sprawl--that must be analyzed and implemented to substantially control air pollution and protect public health. Even if considering other potential public health interventions, which would offer greater benefits at the same or lower costs, only by conducting, promoting, and publishing this sort of analyses, we can make strides to improve public health cost-effectively.

Estimating the Potential Health Benefits of Air Quality Warnings.

National, state, and local air quality authorities issue warnings urging residents to stay indoors or to take other precautions when pollutant levels are expected to exceed defined thresholds. Previous work explores the impact of warnings on specific activities but not the health improvements that might result if individuals fully responded to the recommendations. We estimate these potential health impacts using recent pollution data in three U.S. locations: Denver, Colorado; Los Angeles, California; and Pittsburgh, Pennsylvania. We focus on mortality risks among the elderly, who are particularly vulnerable. Under the strong assumptions of no infiltration and no offsetting indoor sources, we estimate that the benefits associated with avoiding ambient ozone and fine particle exposure are generally less than $14 per person for one additional hour spent indoors on days when air quality thresholds are exceeded. These estimates are sensitive to assumptions regarding the relationship between decreased exposure and mortality risks. Individuals' decisions to stay indoors likely depend on the value of the health benefits compared with the value of forgone work and leisure activities. While the national warning system provides flexibility and allows individuals to tailor their responses to personal circumstances, our analysis suggests that its benefits under typical conditions are small. The benefits of warnings under wildfire or other extreme conditions may be much greater.

Valuing mortality risk in the time of COVID-19.

In evaluating the appropriate response to the COVID-19 pandemic, a key parameter is the rate of substitution between wealth and mortality risk, conventionally summarized as the value per statistical life (VSL). For the United States, VSL is estimated as approximately $10 million, which implies the value of preventing 100,000 COVID-19 deaths is $1 trillion. Is this value too large? There are reasons to think so. First, VSL is a marginal rate of substitution and the potential risk reductions are non-marginal. The standard VSL model implies the rate of substitution of wealth for risk reduction is smaller when the risk reduction is larger, but a closed-form solution calibrated to estimates of the income elasticity of VSL shows the rate of decline is modest until the value of a non-marginal risk reduction accounts for a substantial share of income; average individuals are predicted to be willing to spend more than half their income to reduce one-year mortality risk by 1 in 100. Second, mortality risk is concentrated among the elderly, for whom VSL may be smaller and who would benefit from a persistent risk reduction for a shorter period because of their shorter life expectancy. Third, the pandemic and responses to it have caused substantial losses in income that should decrease VSL. In contrast, VSL is plausibly larger for risks (like COVID-19) that are dreaded, uncertain, catastrophic, and ambiguous. These arguments are evaluated and key issues for improving estimates are highlighted.

Assessing the health impacts of electric vehicles through air pollution in the United States.

The environmental consequences of electric vehicles (EV) have been extensively studied, but the literature on their health impacts is scant. At the same time, fine particulate matter (PM2.5), for which transportation is a major source, remains an important public health issue in the United States. Motivated by recent developments in epidemiology and reduced-form air pollution modeling, as well as reductions in power plant emissions, we conduct an updated assessment of health benefits of light-duty vehicle electrification in large metropolitan areas (MSAs) in the United States. We first calculate MSA-specific mortality impacts per mile attributable to fine particles from internal combustion engine vehicle (ICEV) tailpipe emissions of PM2.5, SO2, NOx, NH3, and volatile organic compounds, and power plant emissions of PM2.5, SO2, and NOx. We complement these with changes in greenhouse-gas emissions associated with vehicle electrification. We find that electrification leads to large benefits, even with EVs powered exclusively by fossil fuel plants. VMT-weighted mean benefits in the 53 MSAs are 6.9 ¢/mile ($10,400 per 150,000 miles), 83% of which (5.7 ¢/mile or $8600 per 150,000 miles) comes from reductions in PM2.5-attributable mortality. Variability among the MSAs is large, with benefits ranging from 3.4 ¢/mile ($5100 per 150,000 miles) in Rochester, NY, to 11.5 ¢/mile ($17,200 per 150,000 miles) in New York, NY. This large variability suggests incentives should vary by MSA and presents an opportunity to target areas for EV deployment aimed at maximizing public health benefits. Impacts are smaller when EVs disproportionately replace newer ICEV models but EVs still lead to positive benefits in all MSAs. Vehicle electrification in urban areas is an opportunity to achieve large public health benefits in the United States in the short term.

Theoretical bounds on the value of improved health.

Policies that improve health and longevity are often valued by combining expected gains in quality-adjusted life years (QALYs) with a constant willingness-to-pay (WTP) per QALY. This constant is derived by dividing value per statistical life (VSL) estimates by expected future QALYs. We explore the theoretical validity of this practice by studying the properties of WTP for improved health and longevity in a framework that makes minimal assumptions about the shape of an agent's utility function. We find that dividing VSL by expected QALYs results in an upper bound on the WTP for a marginal improvement in the quality of life, as measured by gains in health status or longevity. Calibration results suggest that analysts using this approach to monetize health benefits overestimate the value of a program or policy by a factor of two on average. We also derive a lower bound on the WTP for improved health and longevity that permits a novel empirical test for the descriptive validity of the QALY model. Our calibrations suggest that this lower bound is on average 20% smaller than the actual WTP.

Premature Deaths, Statistical Lives, and Years of Life Lost: Identification, Quantification, and Valuation of Mortality Risks.

Mortality effects of exposure to air pollution and other environmental hazards are often described by the estimated number of "premature" or "attributable" deaths and the economic value of a reduction in exposure as the product of an estimate of "statistical lives saved" and a "value per statistical life." These terms can be misleading because the number of deaths advanced by exposure cannot be determined from mortality data alone, whether from epidemiology or randomized trials (it is not statistically identified). The fraction of deaths "attributed" to exposure is conventionally derived as the hazard fraction (R - 1)/R, where R is the relative risk of mortality between high and low exposure levels. The fraction of deaths advanced by exposure (the "etiologic" fraction) can be substantially larger or smaller: it can be as large as one and as small as 1/e (≈0.37) times the hazard fraction (if the association is causal and zero otherwise). Recent literature reveals misunderstanding about these concepts. Total life years lost in a population due to exposure can be estimated but cannot be disaggregated by age or cause of death. Economic valuation of a change in exposure-related mortality risk to a population is not affected by inability to know the fraction of deaths that are etiologic. When individuals facing larger or smaller changes in mortality risk cannot be identified, the mean change in population hazard is sufficient for valuation; otherwise, the economic value can depend on the distribution of risk reductions.

What risk of death would people take to be cured of HIV and why? A survey of people living with HIV.

People living with HIV (PLWHIV) can reasonably expect near-normal longevity, yet many express a willingness to assume significant risks to be cured. We surveyed 200 PLWHIV who were stable on antiretroviral therapy (ART) to quantify associations between the benefits they anticipate from a cure and their risk tolerance for curative treatments. Sixty-five per cent expected their health to improve if cured of HIV, 41% predicted the virus would stop responding to medications over the next 20 years and 54% predicted experiencing serious medication side effects in the next 20 years. Respondents' willingness to risk death for a cure varied widely (median 10%, 75th percentile 50%). In multivariate analyses, willingness to risk death was associated with expected long-term side effects of ART, greater financial resources and being employed (all P < 0.05) but was not associated with perceptions of how their health would improve if cured.

Valuing Mortality Risk Reductions in Global Benefit-Cost Analysis.

The estimates used to value mortality risk reductions are a major determinant of the benefits of many public health and environmental policies. These estimates (typically expressed as the value per statistical life, VSL) describe the willingness of those affected by a policy to exchange their own income for the risk reductions they experience. While these values are relatively well studied in high-income countries, less is known about the values held by lower-income populations. We identify 26 studies conducted in the 172 countries considered low- or middle-income in any of the past 20 years; several have significant limitations. Thus there are few or no direct estimates of VSL for most such countries. Instead, analysts typically extrapolate values from wealthier countries, adjusting only for income differences. This extrapolation requires selecting a base value and an income elasticity that summarizes the rate at which VSL changes with income. Because any such approach depends on assumptions of uncertain validity, we recommend that analysts conduct a standardized sensitivity analysis to assess the extent to which their conclusions change depending on these estimates. In the longer term, more research on the value of mortality risk reductions in low- and middle-income countries is essential.

Conducting Benefit-Cost Analysis in Low- and Middle-Income Countries: Introduction to the Special Issue.

Investing in global health and development requires making difficult choices about what policies to pursue and what level of resources to devote to different initiatives. Methods of economic evaluation are well established and widely used to quantify and compare the impacts of alternative investments. However, if not well conducted and clearly reported, these evaluations can lead to erroneous conclusions. Differences in analytic methods and assumptions can obscure important differences in impacts. To increase the comparability of these evaluations, improve their quality, and expand their use, this special issue includes a series of papers developed to support reference case guidance for benefit-cost analysis. In this introductory article, we discuss the background and context for this work, summarize the process we are following, describe the overall framework, and introduce the articles that follow.