Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-26T06:47:58.817Z Has data issue: false hasContentIssue false

7 - Prioritarianism and Fatality Risk Regulation

Published online by Cambridge University Press:  09 June 2022

By
James K. Hammitt  and
Nicolas Treich
Edited by
Matthew D. Adler  and
Ole F. Norheim
Matthew D. Adler
Affiliation:
Duke University, North Carolina
Ole F. Norheim
Affiliation:
Universitetet i Bergen, Norway
Get access

Summary

Environmental, transportation, occupational, and other regulations that reduce fatality risk are frequently evaluated using benefit-cost analysis (BCA). We examine how risk reductions are valued under BCA, utilitarian and prioritarian SWFs. The social value of risk reduction (SVRR) to an individual is the rate of increase of social welfare for a small decrease to the individual’s current-period fatality risk. Under BCA, the SVRR is the individual’s value per statistical life (VSL), which is increasing in wealth and baseline risk. Under utilitarian and prioritarian SWFs, the SVRR is far less sensitive to income; it can decrease with income for prioritarian SWFs that exhibit sufficient inequality aversion. The SVRR increases with or is independent of baseline risk. Like VSL, it can increase or decrease with age, but prioritarian SWFs assign larger SVRR to younger relative to older individuals than does the utilitarian SWF. Extensions to catastrophe aversion and nonfatal health risks are discussed.

Keywords

mortalityregulationbenefit-cost analysisvalue of a statistical lifefair inningsageincomecatastrophe aversionprioritarianutilitarian
Type
Chapter
Information
Prioritarianism in Practice , pp. 317 - 359
Publisher: Cambridge University Press
Print publication year: 2022

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adler, M.D. (2019). Measuring Social Welfare: An Introduction, Oxford: Oxford University Press.CrossRefGoogle Scholar
Adler, M.D., Ferranna, M., Hammitt, J.K. and Treich, N. (2019). “Fair innings? The utilitarian and prioritarian value of risk reduction over a whole lifetime,” Duke Law School Public Law and Legal Theory Working Paper No. 2019-79. Available at https://ssrn.com/abstract=3493976.Google Scholar
Adler, M.D., Ferranna, M., Hammitt, J.K. and Treich, N. (2021). “Fair innings? The utilitarian and prioritarian value of risk reduction over a whole lifetime,” Journal of Health Economics 75: 102–412.Google Scholar
Adler, M.D., Hammitt, J.K. and Treich, N. (2014). “The social value of mortality risk reduction: VSL versus the social welfare function approach,” Journal of Health Economics 35: 82–93.CrossRefGoogle ScholarPubMed
Baker, R., Chilton, S., Jones-Lee, M. and Metcalf, H. (2008). “Valuing lives equally: defensible premise or unwarranted promise?” Journal of Risk and Uncertainty 36: 125–138.Google Scholar
Bernard, C., Rheinberger, C.M. and Treich, N. (2018). “Catastrophe aversion and risk equity in an interdependent world,” Management Science 64: 4490–4504.Google Scholar
Cameron, T.A. (2010). “Euthanizing the value of a statistical life,” Review of Environmental Economics and Policy 4: 161–178.Google Scholar
Chetty, R., Stepner, M., Abraham, S., Lin, S., Scuderi, B., Turner, N., Bergeron, A. and Cutler, D. (2016). “The association between income and life expectancy in the United States, 2001–2014,” JAMA 315: 1750–1766.Google Scholar
Drèze, J. (1962). “L’Utilité sociale d’une vie humaine,” Revue Française de Recherche Opérationelle, 6: 93–118.Google Scholar
Fleurbaey, M. (2010). “Assessing risky social situations,” Journal of Political Economy 118: 649–680.Google Scholar
Hammitt, J.K. (2021). “Prevention, treatment, and palliative care: the relative value of health improvements under alternative evaluation frameworks,” mimeo, February.CrossRefGoogle Scholar
Harris, J. (1985). The Value of Life, London: Routledge and Kegan Paul.Google Scholar
Jones-Lee, M.W. (1974). “The value of changes in the probability of death or injury,” Journal of Political Economy 82: 835–849.Google Scholar
Keeney, R.L. (1980). “Equity and public risk,” Operations Research 28: 527–534.Google Scholar
Lee, J.M. and Taylor, L.O. (2019). “Randomized safety inspections and risk exposure on the job: quasi-experimental estimates of the value of a statistical life,” American Economic Journal: Economic Policy 11: 350–374.Google Scholar
Levy, J.I. (2021). “Accounting for health risk inequality in regulatory impact analysis: barriers and opportunities,” Risk Analysis 41: 610–618.Google Scholar
Levy, J.I., Chemerynski, S.M. and Tuchmann, J.L. (2006). “Incorporating Concepts of Inequality and Inequity into Health Benefits Analysis,” International Journal for Equity in Health 5: Article 2.Google Scholar
Ng, Y.-K. (1992). “The older the more valuable: divergence between utility and dollar values of life as one ages,” Journal of Economics 55: 1–16.Google Scholar
OECD. (2018). OECD Regulatory Policy Outlook 2018, Paris: OECD Publishing.Google Scholar
Pratt, J.W. and Zeckhauser, R.J. (1996). “Willingness to pay and the distribution of risk and wealth,” Journal of Political Economy 104: 747–763.Google Scholar
Rheinberger, C.M., Herrera-Araujo, D. and Hammitt, J.K. (2016). “The value of disease prevention vs. treatment,” Journal of Health Economics 50: 247–255.Google Scholar
Rheinberger, C.M. and Treich, N. (2017). “Attitudes toward catastrophe,” Environmental and Resource Economics 67: 609–636.CrossRefGoogle Scholar
Robinson, L.A. (2007). “How US government agencies value mortality risk reductions,” Review of Environmental Economics and Policy 1: 283–299.CrossRefGoogle Scholar
Robinson, L.A., Hammitt, J.K. and Zeckhauser, R.J. (2016). “Attention to distribution in U.S. regulatory analyses,” Review of Environmental Economics and Policy 10: 308–328.CrossRefGoogle Scholar
Schelling, T.C. (1968). The life you save may be your own. In Chase, S.B. Jr., ed., Problems in Public Expenditure Analysis. Washington, DC: Brookings Institution, pp. 127–162.Google Scholar
Shepard, D.S. and Zeckhauser, R.J. (1984). “Survival versus consumption,” Management Science 30: 423–439.Google Scholar
Sheriff, G. and Maguire, K.B. (2020). “Health Risk, Inequality Indexes, and Environmental Justice,” Risk Analysis 40: 2661–2674.CrossRefGoogle ScholarPubMed
Simon, N.B., Dockins, C., Maguire, K.B., Newbold, S.C., Krupnick, A.J. and Taylor, L.O. (2019). “What’s in a name? a search for alternatives to ‘VSL’,” Review of Environmental Economics and Policy 13: 155–161.CrossRefGoogle Scholar
Tunçel, T. and Hammitt, J.K. (2014). “A New meta-analysis on the WTP/WTA disparity,” Journal of Environmental Economics and Management 68: 175–187.Google Scholar
U.S. Environmental Protection Agency. (2011). The Benefits and Costs of the Clean Air Act from 1990 to 2020, Final Report, Rev. A, Washington, D.C.Google Scholar
Viscusi, W.K. (2009). “The devaluation of life,” Regulation and Governance 3: 103–127.Google Scholar
Weinstein, M.C., Shepard, D.S. and Pliskin, J.S. (1980). “The economic value of changing mortality probabilities: a decision-theoretic approach,” Quarterly Journal of Economics 94: 373–396.CrossRefGoogle Scholar
Williams, A. (1997). “Intergenerational equity: an exploration of the ‘fair innings’ argument,” Health Economics 6: 117–132.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×