An overview of Value of Statistical Life Estimations- Transportation Perspective

Rouhani, Omid (2024): An overview of Value of Statistical Life Estimations- Transportation Perspective.

Abstract

In this paper, I review the value of statistical life (VOSL) definitions/concepts, mainly in the transportation context. After examining the concept, I provide a background, discussing how the estimates should be different for each case study. Next, I overview a variety of previous studies globally, focusing on their estimated values. Finally, I summarize a few interesting observations regarding this extremely important factor for public policy analyses. The adjusted 2024 VOSL in U.S. dollars ranges from 0.1 million in Russia to 32 million in Canada; 320 times difference! In fact, VOSL values differ substantially by income, age, and geographical region as well as the sector of concern. This conclusion significantly impacts the application of VOSL for social welfare evaluations of transportation projects.

• Item Type: MPRA Paper
• Language: English
• Keywords: Value of statistical life; Transportation; Health-related costs of travel; Social cost benefit analysis
• Subjects: A - General Economics and Teaching > A1 - General Economics; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities ; Redistributive Effects ; Environmental Taxes and Subsidies; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I31 - General Welfare, Well-Being; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O22 - Project Analysis; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R48 - Government Pricing and Policy

References

Adler, M., 2020. What should we spend to save lives in a pandemic? A critique of the value of statistical life. Covid Economics, (33), pp.1-45.

Appelbaum, B. (2011). As U.S. Agencies Put More Value on a Life, Businesses Fret. The New York Times.

Arabsheibani, G.R. and A. Marin. (2000). “Stability of Estimates of the Compensation for Danger,” Journal of Risk and Uncertainty 20(3), 247–269.

Ashenfelter, O. and Greenstone, M., 2004. Using mandated speed limits to measure the value of a statistical life. Journal of political Economy, 112(S1), pp.S226-S267.

Australian Government (2023). Best Practice Regulation Guidance Note: Value of statistical life, Department of the Prime Minister and Cabinet.

Bain, L., 2017. Statistical analysis of reliability and life-testing models: theory and methods. Routledge.

Beheshtian, A., Donaghy, K.P., Geddes, R.R. and Rouhani, O.M., 2017. Planning resilient motor-fuel supply chain. International journal of disaster risk reduction, 24, pp.312-325.

Beheshtian, A., Geddes, R.R., Rouhani, O.M., Kockelman, K.M., Ockenfels, A., Cramton, P. and Do, W., 2020. Bringing the efficiency of electricity market mechanisms to multimodal mobility across congested transportation systems. Transportation Research Part A: Policy and Practice, 131, pp.58-69.

Bowland, B.J. and J.C. Beghin. (2001). “Robust Estimates ofValue of a Statistical Life for Developing Economies,” Journal of Policy Modeling 23, 385–396.

Carlsson, F., Johansson-Stenman, O. and Martinsson, P., 2004. Is transport safety more valuable in the air?. Journal of risk and uncertainty, 28(2), pp.147-163.

De Blaeij, A., Florax, R.J., Rietveld, P. and Verhoef, E., 2003. The value of statistical life in road safety: a meta-analysis. Accident Analysis & Prevention, 35(6), pp.973-986.

de Dios Ortúzar, J., Cifuentes, L.A. and Williams, H.C., 2000. Application of willingness-to-pay methods to value transport externalities in less developed countries. Environment and Planning A, 32(11), pp.2007-2018.

Daher, N., Yasmin, F., Wang, M., Moradi, E. and Rouhani, O., 2018. Perceptions, Preferences, and Behavior Regarding Energy and Environmental Costs: The Case of Montreal Transport Users. Sustainability, 10(2), p.514.

Dionne, G., & Lanoie, P. (2004). Public choice about the value of a statistical life for cost-benefit analyses: The case of road safety. Journal of Transport Economics and Policy, 38(2), 247–274.

Do, W., Rouhani, O.M. and Miranda-Moreno, L., 2019. Simulation‐based connected and automated vehicle models on highway sections: A literature review. Journal of Advanced Transportation, 2019(1), p.9343705.

Do, W., Rouhani, O.M., Geddes, R.R. and Beheshtian, A., 2020. A comprehensive welfare impact analysis for road expansion projects: A case study. Case Studies on Transport Policy, 8(3), pp.1053-1061.

Do, W., Rouhani, O.M., Geddes, R.R. and Beheshtian, A., 2021. Social impact analysis of various road capacity expansion options: a case of managed highway lanes. Journal of transportation engineering, Part A: Systems, 147(7), p.04021033.

Dockins, C., Maguire, K., Simon, N. and Sullivan, M., 2004. Value of statistical life analysis and environmental policy: A white paper. US Environmental Protection Agency, National Center for Environmental Economics.

H. M. Treasury. (2011). The green book: Appraisal and evaluation in central government. London: HM Treasury.

Hogan S, Song Z. 2022. The Cost of Long-term Conditions in New Zealand: Review of the evidence – 2021 update. Wellington: New Zealand Institute of Economic Research.

Hoon, S.; Lim, K. M. (2008). The value of statistical life in Singapore. Digital Repository of NTU, Available from: http://hdl.handle.net/10356/13378, Accessed December 2024.

Hultkrantz, Lars (2012). The value of a statistical life in Sweden: A review of the empirical literature. Health Policy. 108 (2–3): 302–310.

Jones-Lee, M. W., Hammerton, M., & Philips, P. R. (1985). The value of safety: Results of a national sample survey. The Economic Journal, 95, 49–72.

Jones-Lee, M.W. and Jones-Lee, M., 1990. The value of transport safety. Oxford review of economic policy, 6(2), pp.39-60.

Jones, H., Moura, F. and Domingos, T., 2014. Transport infrastructure project evaluation using cost-benefit analysis. Procedia-Social and Behavioral Sciences, 111, pp.400-409.

Lanoie, P., C. Pedro, and R. Latour. (1995). “The Value of a Statistical Life: A Comparison of Two Approaches,” Journal of Risk and Uncertainty 10, 235–257.

Le, H., van Geldermalsen, T., Lim, W.L. and Murphy, P., 2011, September. Deriving accident costs using willingness-to-pay approaches-A case study for Singapore. In Australasian Transport Research Forum (ATRF), 34th.

Lepeule, J., Laden, F., Dockery, D., Schwartz, J. (2012) Chronic exposure to fine particles and mortality: an extended follow-up of the Harvard Six Cities study from 1974 to 2009, Environ. Health Prospect, 120 (7) (2012), p. 965.

Lindhjem, H., Navrud, S., Braathen, N.A. and Biausque, V., 2011. Valuing mortality risk reductions from environmental, transport, and health policies: A global meta‐analysis of stated preference studies. Risk Analysis: An International Journal, 31(9), pp.1381-1407.

Liu, J.-T. and J.K. Hammitt. (1999). “Perceived Risk and Value of Workplace Safety in a Developing Country,” Journal of Risk Research 2(3), 263–275.

Majumder, A. and Madheswaran, S., 2018. Value of statistical life in India: A hedonic wage approach. Institute for Social and Economic Change.

Mashayekh, Y., Jaramillo, P., Chester, M., Hendrickson, C. and Weber, C., 2011. Costs of automobile air emissions in US metropolitan areas. Transportation Research Record: Journal of the Transportation Research Board, (2233), pp.120-127.

McCubbin, D.R. and Delucchi, M.A., 1999. The health costs of motor-vehicle-related air pollution. Journal of Transport Economics and Policy, pp.253-286.

Madani, K., Rouhani, O.M., Pournazeri, S., Moradi, M. and Sheikhmohammady, M., 2011. Can we rely on renewable energy sources to overcome global warming?. In World Environmental and Water Resources Congress 2011: Bearing Knowledge for Sustainability (pp. 3319-3326).

Madani, K., Rouhani, O.M., Mirchi, A. and Gholizadeh, S., 2014. A negotiation support system for resolving an international trans-boundary natural resource conflict. Environmental modelling & software, 51, pp.240-249.

Majumder, Agamoni; Madheswaran, S. (2018). Value of Statistical Life in India: A Hedonic Wage Approach. Institute for Social and Economic Change. ISBN 978-81-7791-263-0.

Ministry of Transport (2016) Social cost of road crashes and injuries 2016 update" New Zealand Transportation Website.

Mirchi, A., Hadian, S., Madani, K., Rouhani, O.M. and Rouhani, A.M., 2012. World energy balance outlook and OPEC production capacity: implications for global oil security. Energies, 5(8), pp.2626-2651.

Persson, U., Norinder, A., Hjalte, K. and Gralén, K., 2001. The value of a statistical life in transport: findings from a new contingent valuation study in Sweden. Journal of Risk and Uncertainty, 23(2), pp.121-134.

Pope III, C.A., Ezzati, M. and Dockery, D.W., 2009. Fine-particulate air pollution and life expectancy in the United States. New England Journal of Medicine, 360(4), pp.376-386.

Riera, P., Mhawej, A., Mavsar, R. and Brey, R., 2006. Fixed‐effects Hedonic Price Model for Statistical Value of Live Estimations. Transport Reviews, 26(4), pp.487-500.

Rouhani, O.M., 2009. Road privatization and sustainability. MIT Journal of planning, 6, pp.82-105.

Rouhani, O.M., 2010. Gas Consumption Information: A Substitute for Congestion Pricing?, DOI: 10.22004/ag.econ.207246

Rouhani, O.M. and Niemeier, D., 2011. Urban network privatization: Example of a small network. Transportation research record, 2221(1), pp.46-56.

Rouhani, O., 2014. Road pricing: An overview. MPRA_paper_59662

Rouhani, O.M. and Gao, H.O., 2014. An advanced traveler general information system for Fresno, California. Transportation Research Part A: Policy and Practice, 67, pp.254-267.

Rouhani, O.M. and Niemeier, D., 2014a. Resolving the property right of transportation emissions through public–private partnerships. Transportation Research Part D: Transport and Environment, 31, pp.48-60.

Rouhani, O.M. and Niemeier, D., 2014b. Flat versus spatially variable tolling: A case study in Fresno, California. Journal of Transport Geography, 37, pp.10-18.

Rouhani, O.M., Gao, H.O., Geddes, R., Bel, G. and Zarei, H., 2014. Social Welfare Analysis for Alternative Investment Public-Private Partnership Approaches. In Lecture presentation in the 2014 Transportation Research Board conference, Washington DC.

Rouhani, O.M., Gao, H.O. and Geddes, R.R., 2015a. Policy lessons for regulating public–private partnership tolling schemes in urban environments. Transport Policy, 41, pp.68-79.

Rouhani, O.M., Gao, H.O., Zarei, H. and Beheshtian, A., 2015b, January. Implications of fuel and emissions externalities, spillovers to the outside, and temporal variations on zonal congestion pricing schemes. In Transportation Research Board 94th Annual Meeting (No. 15-0905).

Rouhani, O.M., 2016. Next generations of road pricing: Social welfare enhancing. Sustainability, 8(3), p.265.

Rouhani, O. M., and A. Beheshtian. 2016, Energy Management. Book chapter in Multi Vol. Set on Energy Science and Technology.

Rouhani, O.M. and Gao, H.O., 2016. Evaluating various road ownership structures and potential competition on an urban road network. Networks and Spatial Economics, 16, pp.1019-1042.

Rouhani, O.M., Geddes, R.R., Gao, H.O. and Bel, G., 2016a. Social welfare analysis of investment public–private partnership approaches for transportation projects. Transportation Research Part A: Policy and Practice, 88, pp.86-103.

Rouhani, O.M., Niemeier, D., Gao, H.O. and Bel, G., 2016b. Cost-benefit analysis of various California renewable portfolio standard targets: Is a 33% RPS optimal?. Renewable and Sustainable Energy Reviews, 62, pp.1122-1132.

Rouhani, O.M., 2018. Beyond standard zonal congestion pricing: A detailed impact analysis. Journal of Transportation Engineering, Part A: Systems, 144(9), p.04018052.

Rouhani, O.M., Geddes, R.R., Do, W., Gao, H.O. and Beheshtian, A., 2018. Revenue-risk-sharing approaches for public-private partnership provision of highway facilities. Case Studies on Transport Policy, 6(4), pp.439-448.

Rouhani, O.M., 2019. Transportation Project Evaluation Methods/Approaches. MPRA_paper_91451.

Rouhani, O.M., 2021. Public policy theories for transportation project evaluations: A book review. Case Studies on Transport Policy 9(2), pp. 497-499.

Rouhani, O., 2022a. Are transportation solutions doomed to fail climate-change actions? A book review. MPRA_paper_115675.

Rouhani, O.M., 2022b. Road pricing versus political philosophies: A book review. Case Studies on Transport Policy 10(2), pp. 1453-1456.

Small, K.A., 1977. Estimating the air pollution costs of transport modes. Journal of Transport Economics and Policy, 11(2), pp.109-132.

Smith, A. (1776). The Wealth of Nations. Chicago: University of Chicago Press. 1976 edition.

Tekeşin, C.; Ara, S. (2017). The Monetary Valuation of Lifetime Health Improvement and Life Expectancy Gains in Turkey. International Journal of Environmental Research and Public Health. 14 (10): 1151.

Transportation Safety Board of Canada (2018), Reassessment of the responses to Aviation Safety Recommendation A06-08, Available from: http://www.bst-tsb.gc.ca/eng/recommandations-recommendations/aviation/2006/rec_a0608.asp

Transport Safety Commission (2015). "UK Transport Safety: Who is responsible?" Available from: https://www.pacts.org.uk/wp-content/uploads/TSCResponsibility_LowRes-COMPLETE-FINAL.pdf, Retrieved 7 April 2024

U.S. Department of Transportation (2016), Guidance on treatment of the economic value of a statistical life in U.S. department of transportation analyses, Available from: https://cms.dot.gov/sites/dot.gov/files/docs/2016%20Revised%20Value%20of%20a%20Statistical%20Life%20Guidance.pdf , Accessed February 2019.

U.S. Department of Transportation (2021). Departmental Guidance on Valuation of a Statistical Life in Economic Analysis. Retrieved 24 October 2023.

U.S. Environmental Protection Agency (2019), Mortality Risk Valuation, Available from: https://www.epa.gov/environmental-economics/mortality-risk-valuation , Accessed February 2019.

US Environmental Protection Agency, (2010). Valuing mortality risk reductions for environmental policy: a white paper.

U.S. office of Management and Budget (OMB) (2003), Circular A-4, Available from: https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4, Accessed November 2024.

Vassanadumrongdee, S. and Matsuoka, S., 2005. Risk perceptions and value of a statistical life for air pollution and traffic accidents: evidence from Bangkok, Thailand. Journal of Risk and Uncertainty, 30, pp.261-287.

Viscusi, W.K., 1993. The value of risks to life and health. Journal of economic literature, 31(4), pp.1912-1946.

Viscusi, W.K., 2004. The value of life: estimates with risks by occupation and industry. Economic Inquiry, 42(1), pp.29-48.

Viscusi, W.K. and Aldy, J.E., 2003. The value of a statistical life: a critical review of market estimates throughout the world. Journal of risk and uncertainty, 27(1), pp.5-76.

Viscusi, W.K. and Gentry, E.P., 2015. The value of a statistical life for transportation regulations: A test of the benefits transfer methodology. Journal of Risk and Uncertainty, 51(1), pp.53-77.

Weitzman, M.L., 2007. Structural uncertainty and the value of statistical life in the economics of catastrophic climate change. NBER, WORKING PAPER 13490.

Wolfe, P., Davidson, K., Fulcher, C., Fann, N., Zawacki, M. and Baker, K.R., 2019. Monetized health benefits attributable to mobile source emission reductions across the United States in 2025. Science of The Total Environment, 650, pp.2490-2498.

Zykova, T. (2015). Стоимость человеческой жизни в России в 2015 году составила 4,5 млн. Available from: Рубле, rg.ru website.