Hammitt at Symposium on Valuing Health – Center for Health Decision Science

CHDS’ James Hammitt recently participated in the Symposium on Valuing Life and Health, sponsored by the Australian National University. The symposium brought together expert policy makers and academics to discuss both theoretical and practical challenges to valuing changes in length and quality of life.

Hammitt participated in two panel discussions: Global Estimates of the Value of Life and Current Practice and Challenges in Valuing Life and Health in Different Jurisdictions. In addition, he presented Quandaries in Valuing Mortality Risk. The conventional approach to valuing mortality risk relies on the “value per statistical life (VSL),” which is a concept to estimate an individual’s willingness to pay for a small change in their own mortality risk. Hammitt explains that there are a number of quandaries about this concept, from both an individual and societal perspective. From the individual perspective, the monetary value of a non-marginal change in risk implied by the conventional model seems implausibly large. Although the marginal willingness to pay for risk reduction decreases as more is bought, the decrease is not sharp enough to avoid near impoverishment for modest risk reductions, which seems implausible. From the social perspective, an individual’s VSL may not be a good guide to how much should be spent on reducing her risk; while an individual facing high mortality risk may have a low opportunity cost of spending and a large VSL, the social opportunity cost is much larger. Moreover, lack of an interpersonally comparable utility measure limits analysts’ ability to compare benefits and harms across individuals and to determine whether an intervention constitutes a social improvement.

Learn more: Read about the Symposium on Valuing Life and Health
Learn more: Explore the CHDS approaches to Benefit-Cost-Analysis, including Valuing Mortality Risks
Learn more: Explore the CHDS resources on VSL