E- from Theory and Practice in Policy Analysis, w hat is the “value of a statist
ID: 294998 • Letter: E
Question
E- from Theory and Practice in Policy Analysis, what is the “value of a statistical life” and how should we think about it? Is it ethical to use a dollar value for VSL? How should we estimate VSL? Should we target decisions towards activities that reduce accidental deaths at lowest overall cost, or do the features of the risk matter? What do you think about “contingent valuation” as a concept? Is it a good idea? Ethical? If it isn’t ethical, are there ways we can make it more ethical to use? How should we value ecosystems and other “natural” goods? Are there some things that should just be left unquantified?
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Explanation / Answer
Ans :
Value of a statistical life is something which is used to calculate the value of mortality risk reduction. it is basically introduced by Ministry of Transport in 1991 and its a way to measure the country's loss of life in dollars
Ex: Suppose we are introducing a policy in which it states that mortality risk by 1 in 10,000. If say 10,000 are affected by this policy then 1 death would be avoided.
yes, its ethical to use a dollar value for VSL because in Twenty-three years on, just one person dies on our roads each day. Instead of 30 hospitalisations, there are about 19. and that’s despite a population increase of about a million people. but Of course, such improvements can’t be put down to only VSL alone – cars are safer, drivers are better trained, licencing is more stringent. On net, it’s been a highly effective tool.
Putting a price on life is a messy science – especially given that the priorities and values of the public are at the heart of it.
VSL estimation: Suppose1/10,0000 risk to 10,000 so 1 expected death.
just imagine each would pay $500 to eliminate the risk.
so VSL = 10,000 people X $500/person = 5,000,000.
As such, it is a statistical term, the cost of reducing the average number of deaths by one. It is an important issue in a wide range of disciplines including economics, health care, adoption, political economy, insurance, worker safety, environmental impact assessment, and globalization.
In industrial nations, the justice system considers a human life "priceless", thus illegalizing any form of slavery.i.e., humans cannot be bought at any price. However, with a limited supply of resources or infrastructural capital or skill at hand, it is impossible to save every life, so some trade-off must be made. Also, this argumentation neglects the statistical context of the term. It is not commonly attached to lives of individuals or used to compare the value of one person's life relative to another person's. It is mainly used in circumstances of saving lives as opposed to taking lives .
Contingent Valuation is a method of estimating the value that a person places on a good. The approach asks people to directly report their willingness to pay (WTP) to obtain a specified good, or willingness to accept (WTA) to give up a good, rather than inferring them from observed behaviours in regular market places.economic technique for the valuation of non-market resources, such as environmental preservation or the impact of contamination. While these resources do give people utility, certain aspects of them do not have a market price as they are not directly sold – for example, people receive benefit from a beautiful view of a mountain, but it would be tough to value using price-based models. yes its best approach we can say. espicially usefull when market doesn't exist. ex: protected area yet be established.
This technique has been widely used by government departments. when performing cost-benefit analysis of projects impacting, positively or negatively, on the environment. Ex: valuation of water quality and recreational opportunities in the river downstream from Glen Canyon dam, biodiversity restoration in the Mono Lake and restoration of salmon spawning grounds in certain rivers. The technique has also been used in Australia to value areas of the Kakadu National as well as trophy property in the United States, and is recognized as a valuable tool in the appraisal of brownfields.
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