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Valuing Mortality Risk in China: Comparing Stated-Preference Estimates from 2005 and 2016

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  • Hammitt, James K.
  • Geng, Fangli
  • Guo, Xiaoqi
  • Nielsen, Chris P.

Abstract

We estimate the marginal rate of substitution of income for reduction in current annual mortality risk (the “value per statistical life” or VSL) using stated-preference surveys administered to independent samples of the general population of Chengdu China in 2005 and 2016. We evaluate the quality of estimates by the theoretical criterion that WTP for risk reduction should be strictly positive and nearly proportional to the magnitude of the risk reduction (evaluated by comparing answers between respondents). We test the effect of excluding respondents whose answers violate these validity criteria. For subsamples of respondents that satisfy the criteria, point estimates of the sensitivity of WTP to risk reduction are consistent with theory and yield estimates of VSL that are two to three times larger than estimated using the full samples. Between 2005 and 2016, estimated VSL increased sharply, from about 22,000 USD in 2005 to 550,000 USD in 2016. Income also increased substantially over this period. Attributing the change in VSL solely to the change in income implies an income elasticity of about 2.5.

Suggested Citation

  • Hammitt, James K. & Geng, Fangli & Guo, Xiaoqi & Nielsen, Chris P., 2019. "Valuing Mortality Risk in China: Comparing Stated-Preference Estimates from 2005 and 2016," TSE Working Papers 19-1020, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:123115
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    Cited by:

    1. Aditi Kharb & Sandesh Bhandari & Maria Moitinho de Almeida & Rafael Castro Delgado & Pedro Arcos González & Sandy Tubeuf, 2022. "Valuing Human Impact of Natural Disasters: A Review of Methods," IJERPH, MDPI, vol. 19(18), pages 1-11, September.
    2. James K. Hammitt, 2020. "Valuing mortality risk in the time of COVID-19," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 129-154, October.
    3. Rong Tang & Jing Zhao & Yifan Liu & Xin Huang & Yanxu Zhang & Derong Zhou & Aijun Ding & Chris P. Nielsen & Haikun Wang, 2022. "Air quality and health co-benefits of China’s carbon dioxide emissions peaking before 2030," Nature Communications, Nature, vol. 13(1), pages 1-9, December.
    4. Anna Alberini & Milan Ščasný, 2021. "On the validity of the estimates of the VSL from contingent valuation: Evidence from the Czech Republic," Journal of Risk and Uncertainty, Springer, vol. 62(1), pages 55-87, February.
    5. James K. Hammitt & Jin-Tan Liu & Jin-Long Liu, 2022. "Is survival a luxury good? Income elasticity of the value per statistical life," Journal of Risk and Uncertainty, Springer, vol. 65(3), pages 239-260, December.
    6. James K. Hammitt & Tuba Tunçel, 2023. "Monetary values of increasing life expectancy: Sensitivity to shifts of the survival curve," Journal of Risk and Uncertainty, Springer, vol. 67(3), pages 239-269, December.
    7. Dan Cai & Si Shi & Shan Jiang & Lei Si & Jing Wu & Yawen Jiang, 2022. "Estimation of the cost-effective threshold of a quality-adjusted life year in China based on the value of statistical life," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(4), pages 607-615, June.
    8. Mengna Luan & Zhigang Tao & Hongjie Yuan, 2023. "Alive but not well: The neglected cost of air pollution," Health Economics, John Wiley & Sons, Ltd., vol. 32(11), pages 2535-2567, November.
    9. James K. Hammitt & Peter Morfeld & Jouni T. Tuomisto & Thomas C. Erren, 2020. "Premature Deaths, Statistical Lives, and Years of Life Lost: Identification, Quantification, and Valuation of Mortality Risks," Risk Analysis, John Wiley & Sons, vol. 40(4), pages 674-695, April.
    10. Jytte Seested Nielsen & Dorte Gyrd‐Hansen & Trine Kjær, 2021. "Sample restrictions and the elicitation of a constant willingness to pay per quality adjusted life year," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 923-931, May.
    11. W. Kip Viscusi, 2019. "Risk guideposts for a safer society: Introduction and overview," Journal of Risk and Uncertainty, Springer, vol. 58(2), pages 101-119, June.
    12. Jin, Yana & Andersson, Henrik & Zhang, Shiqiu, 2020. "Do preferences to reduce health risks related to air pollution depend on illness type? Evidence from a choice experiment in Beijing, China," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    13. Wang, Shanyong & Zhang, Rongwei & Wan, Liang & Chen, Jiusong, 2023. "Has Central Government Environmental Protection Interview Improved Air Quality in China?," Ecological Economics, Elsevier, vol. 206(C).

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    More about this item

    Keywords

    value per statistical life; stated preference; willingness to pay;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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