Using Social-Welfare Functions to Evaluate Policies that Reduce Mortality Risk

Investigating alternative approaches to valuing risk reductions
Matthew Adler

Nicolas Treich


The conventional approach to evaluating policies that reduce mortality risk is benefit-cost analysis using the value per statistical life to convert changes in risk to monetary values. Some commentators find this approach objectionable because, at least in principle, it does not value risk reductions equally across people but assigns higher value to wealthier individuals and those at higher baseline risk. We are investigating the properties of alternative social-welfare functions to determine how they value risk reductions as a function of individual characteristics.