Value of a life year (VOLY)

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Moderator:Virpi Kollanus (see all)

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Scope

What is the monetary value of a statistical life year derived from studies on societal willingness to pay (WTP) for mortality risk reductions?

Definition

Data

ExternE 2005 ^[1]

Results are based on a contingent valuation study (NewExt) on changes in life-expectancy conducted simultaneously in France, UK, and Italy. The objective of the study was to derive monetary unit value for the incidence of premature death resulting from air pollution in Europe. The survey protocol included people over the age of 40, with 1/3 of these above the age of 60.

Chronic exposure mortality impacts (death after 10 years of exposure, 3% discount rate applied)
- Upper bound: €151 110
- Mean: €125 250
- Median: €55 800 (rounded to €50 000, recommended central estimate)
- Lower bound: €18 250
Acute exposure mortality impacts (immediate death, assumed that the victim's health condition is not a factor in WTP, no discount applied)
- Upper bound: €225 000
- Median: €75 000
- Lower bound: €27 240
A Weibull distribution is assumed because it had the best fit to the data
Upper and lower bounds are considerably less robust than the central estimates

Values used in CAFE CBA 2005 ^[2]

Values are based on the NewExt study, price year 2000

Chronic exposure mortality impacts
- Median: €52 000
- Mean: €120 000

NEEDS 2006 ^[3]

Recommended mean VOLY estimates for Europe:

EU15 + Switzerland €41 000
New member countries €33 000
EU25 €40 000

Dependencies

VOLY is expected to vary from country to country due to income levels and cultural valuations.

Unit

euro/one statistical life year

Formula

A rough compilation is done of the above-mentioned ranges.

Stepwise uniform: (cumulative probabilities 0, 0.05, 0.25, 0.5, 0.75, 0.95, 1)(18250, 27240, 41000, 52000, 75000, 125250, 151110)

Result

Keywords

References

Related files

[1] European Commission 2005. ExternE, Externalities of Energy, Methodology 2005 Update. Bickel P & Friedrich R (Eds.)

[2] Service Contract for Carrying out Cost-Benefit Analysis of Air Quality Related Issues, in particular in the Clean Air for Europe (CAFE) Programme. Volume 2: Health Impact Assessment. AEA Technology Environment, 2005.

[3] Desaigues et al. 2006. Final report on the monetary valuation of mortality and morbidity risks from air pollution. Ned Energy Externalities Developments for Sustainability (NEEDS). Sixth framework programme, Project no: 502687.

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