Building a Set of Internationally Comparable Value of Statistical Life Studies: Estimates of Chinese Willingness to Pay to Reduce Mortality Risk

Abstract

This study is the eighth in a series of stated-preference studies designed to enhance the basis for international benefits transfer of value of statistical life (VSL) estimates. The series has fielded essentially similar stated-preference surveys in Canada, China, France, Italy, Japan, Mongolia, the United Kingdom, and the United States. This Chinese study estimates the willingness to pay for contemporaneous and future mortality risk reductions of residents of Shanghai, Jiujiang, and Nanning, China using a stated-preference payment-card survey. The pooled VSL for a contemporaneous reduction in annual mortality risk reduction of 5 in 10,000 is about 1.47 million 2009 yuan ($614,805 U.S. $2016), with income elasticities of 0.2 to 0.25. This VSL estimate is at the lower end of estimates from the eight countries, between those from Mongolia and Japan, and in the mid-range of estimates of willingness to pay (WTP) for mortality risk reductions as a percentage of household income. We find lower discount rates in the Mongolia, Japan, and China studies than in those fielded in North America or Europe. The study also explores the relative performance of dichotomous choice and stated-preference card elicitation methods in a middle income country setting and develops a computerized "payment card" that allows testing for anchoring. Implicit transfer elasticities across countries, calculated using the VSLs we estimate and each country's income, relative to those of the United States, yields estimates of 0.88-0.95 for the lower income countries. These compare with the default assumption of 1.0 or assumed elasticities of 1.2 for developing countries.

Valuing mortality risk in the time of COVID-19

“…The most direct is to examine how estimated VSL varies with respondents' income in stated-preference studies. This approach generally yields estimates that are statistically significantly positive but less than one, in many cases less than one-half (e.g., between 0.1 and 0.4 in Corso et al 2001, Alberini et al 2004, andHammitt and Haninger 2010, about 0.7 in Cameron and DeShazo 2013, between 0.2 and 0.6 in a set of studies in several countries reported by Hoffmann et al 2017). Using self-reported tax payments of Swiss respondents to infer their wealth, Rheinberger (2011) estimated the wealth elasticity of VSL as 0.90 and 0.96 in alternative models.…”

Income Elasticities and Global Values of a Statistical Life

“…OECD (2012) estimated income elasticities using stated preference studies from multiple countries; the estimated elasticities were between 0.7 and 0.9 using their preferred screening criteria for studies included in the analysis, although the elasticities were as low as 0.3 in some subsets of their data and increased to 1.0 with an unscreened sample. Hoffmann et al (2017) estimated income elasticities between 0.2 and 0.6 using stated preference studies covering several countries. Doucouliagos, Stanley and Giles (2012) demonstrated that controlling for publication selection bias results in a lower estimated VSL income elasticity, finding a range of elasticities between 0.20 and 0.38.…”

The Income Elasticity of Global Values of a Statistical Life: Stated Preference Evidence

“…However, the VSL estimates that we focus on here are based on stated preference studies rather than labor market studies. There have been some income elasticity estimates derived from estimates across a sample of individual stated preference responses, such as that in Hoffmann et al (2017), who estimated an elasticity of 0.2-0.6 in China. Another approach is that of cross-country comparisons, as in Hammitt and Ibarrarán (2006), who estimated an elasticity range of 1.4-2.0.…”