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Revisiting the value of a statistical life: an international approach during COVID-19

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  • Nadia J. Sweis

    (Princess Sumaya University for Technology)

Abstract

Although the employment of the value of a statistical life (VSL) is a cornerstone of USA governmental risk analysis, many argue that the VSL is flawed when evaluating proposed regulations. The VSL is only an estimate of the willingness to accept wage versus risk, which may be inaccurate for policies that mitigate large risks in pandemics, such as COVID-19. The VSL is revisited using a different approach and utilized in measuring the total value of loss from deaths caused by COVID-19 for 48 selected countries. The modified theory of the demand for health by Gary Becker is utilized to measure the VSL resulting from consumer optimization of utility, subject to constraints and investments in health made to change their survivorship at different ages. Estimates show that the VSL for an average American is around $7.2 million compared to the world VSL of about $1.3 million. Switzerland has the highest VSL of approximately $9.4 million. The total value of loss from deaths caused by COVID-19 is around 6.1% of the USA GDP, compared to the global loss of 1.2% of the world's GDP, while Belgium has the highest value of loss with 9.7% of its GDP. The best possible data and procedures are necessary to make robust and reliable public health decisions while responding to the COVID-19 pandemic. The VSL measure introduced here can be applied to a specific individual, group, or population. It is comprehensive, straightforward, generalizable, and provides a consistent measure with the most popular methods. More importantly, it provides an added value to the existing methods that enable us to break down the VSL into two main components, one that accounts for working time. The other accounts for leisure time and different diminishing consumption and discount rates.

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  • Nadia J. Sweis, 2022. "Revisiting the value of a statistical life: an international approach during COVID-19," Risk Management, Palgrave Macmillan, vol. 24(3), pages 259-272, September.
    • Handle: RePEc:pal:risman:v:24:y:2022:i:3:d:10.1057_s41283-022-00094-x
    DOI: 10.1057/s41283-022-00094-x
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    References listed on IDEAS

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    Cited by:

    1. Rachel Glennerster & Christopher M. Snyder & Brandon Joel Tan, 2023. "Calculating the Costs and Benefits of Advance Preparations for Future Pandemics," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(3), pages 611-648, September.
    2. Jose A. Valderrama & Javier Olivera, 2023. "The effects of social pensions on mortality among the extreme poor elderly," Documentos de Trabajo / Working Papers 2023-525, Departamento de Economía - Pontificia Universidad Católica del Perú.
    3. Leiva-Perez William H., 2024. "Quantification of the Economic Burden of Premature Mortality: The Case for the Three Least and Most Burdensome Countries within the European Union," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 18(1), pages 3222-3234.
    4. James K. Hammitt, 2023. "Consistent valuation of a reduction in mortality risk using values per life, life year, and quality‐adjusted life year," Health Economics, John Wiley & Sons, Ltd., vol. 32(9), pages 1964-1981, September.
    5. Virat Agrawal & Neeraj Sood & Christopher M. Whaley, 2023. "The Impact of the Global COVID-19 Vaccination Campaign on All-Cause Mortality," NBER Working Papers 31812, National Bureau of Economic Research, Inc.
    6. Jaleel Jerry G. Sweis & Fatima Alnaimat & Valeria Esparza & Supritha Prasad & Abeera Azam & Zeel Modi & Mina Al-Awqati & Pim Jetanalin & Nadia J. Sweis & Christian Ascoli & Richard M. Novak & Israel R, 2024. "From Acute Infection to Prolonged Health Consequences: Understanding Health Disparities and Economic Implications in Long COVID Worldwide," IJERPH, MDPI, vol. 21(3), pages 1-18, March.

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