The social value of mortality risk reduction: VSL versus the social welfare function approach.
We examine how different welfarist frameworks evaluate the social value of mortality risk reduction. These frameworks include classical, distributively unweighted cost-benefit analysis--i.e., the "value per statistical life" (VSL) approach-and various social welfare functions (SWFs). The SWFs are either utilitarian or prioritarian, applied to policy choice under risk in either an "ex post" or "ex ante" manner. We examine the conditions on individual utility and on the SWF under which these frameworks display sensitivity to wealth and to baseline risk. Moreover, we discuss whether these frameworks satisfy related properties that have received some attention in the literature, namely equal value of risk reduction, preference for risk equity, and catastrophe aversion. We show that the particular manner in which VSL ranks risk-reduction measures is not necessarily shared by other welfarist frameworks.
Duke Law School, 210 Science Drive, Box 90360, Durham, NC 27708, USA. Electronic address: adler@law.duke.edu.
Matthew D
MD
Adler
Harvard University (Center for Risk Analysis), 718 Huntington Avenue, Boston, MA 02115, USA; Toulouse School of Economics (LERNA-INRA), 21 allée de Brienne, 31000 Toulouse, France.
James K
JK
Hammitt
Toulouse School of Economics (LERNA-INRA), 21 allée de Brienne, 31000 Toulouse, France.
Nicolas
N
Treich
D001293:Attitude to Death; D003362:Cost-Benefit Analysis; D006801:Humans; D040242:Risk Reduction Behavior; D012945:Social Values; D012946:Social Welfare / Q000191:economics*; D012959:Socioeconomic Factors; D026712:Value of Life / Q000191:economics*
Cost–benefit analysis; Equity; Risk policy; Social welfare functions; Value of statistical life