Prevention, precaution and resilience: Are they worth the cost?

Safety Science, 2009

A Value of Statistical Life (VSL) is used in cost-benefit analysis (CBA) as a monetary measure of the benefits to people from small risk reductions that arise from safety projects. Despite its widespread use in a number of countries, the concept of a VSL remains controversial, not least because it implies acceptance of the underlying ethical assumptions of CBA together with the idea that 'social welfare' can be measured and aggregated in some manner. In addition, to comply with theory, variable VSLs for different groups within society would be advocated. However, without fail, empirically, it is the case that those countries that employ a willingness to pay based approach to benefit-cost analysis of a safety project appraisal tend to use a single value for that accident context that is independent of the per capita income level, or indeed other personal characteristics, of the subgroup in society to which the safety improvement will actually apply. This article presents a straightforward, but theoretically justified adaptation to the calculation of a VSL which allows empirical practice by policymakers i.e. the application of a "common" VSL for any particular hazard within a given society, to be compatible with a CBA decision making approach.

Medical research archives, 2018

In a previous paper, we discussed that the application of cost benefit analysis (CBA) often incurs setting a value to a statistical human life (VOSL). This led to decades of research into what a reasonable value should be. These evaluations of the VOSL lead to widely varying results. Rather than attempting to harmonize on an average with large margins of uncertainty, the conclusion can be drawn that indeed there is no law of nature that determines what risk is acceptable and that, therefore, a consistent valuation of a human life cannot be expected. Nor can it be expected that there is a universally valid number for the acceptability of a risk. We argue that one should accept that standardization of acceptable risks has its practical limitations given by the – lack of – similarity in nature of the activity and the nature of the risk. In fact, attempts to force standardization are counterproductive. In many cases, one has to accept the only available alternative not involving violenc...

The ethical assessment of extreme risk, or uncertainty scenarios present peculiar and important decision problems from both a theoretical, a practical and a pragmatic policy making standpoint. As human beings get better and better at systematically imagining what might occur given some actions or policies, more and more such assessments are actualised, e.g. with regard to environmental, computer, bio-, military and nano-technology, as well as “natural” hazards, where as yet non-existent technology might provide mitigation of otherwise unavoidable massive harms. At the same time, resources are limited, human time is scarce and ethical theory basically impotent of guiding tenets as to how the management of uncertain outcomes and actions are to be assessed in normative terms. For instance, as I write this, the Large Hadron Collider team at the CERN lab outside Geneva are making last preparation for the “beam injection” experiment, for which at least two prominent physicists have issued stern #end of the world” warnings. How should this be managed, and why? Depending on the answer, what does that imply for the implementation of, e.g. uncertain actions to counter the potential harms of climate change, the eventuality that a meteorite might hit Earth, or that our own technology shaped to manage this dangerous world of our’s pulls the rug out from under our feet? (here we have everything from antimicrobial resistance to rebelling synbio AI’s on the menu). Especially if we consider less distant needs, for which there exist quite workable solutions, if only the funds for their implementation are released – such as the quarter of a million children dying of starvation every month. At the same time, some of the futurustic fears may not themselves be worthy our dread – at least not if we think disciplined and ethically ablout it. The talk will dig into this mass of issues, with a particular concentration on the ethics of exploring distant (albeit potent) dangers and salvation, using the concept of the price of precaution, developed by myself in some recent writings. References: Munthe, C (2011). The Price of Precaution and the Ethics of Risk. Springer SBM.

2014

The objective of this review study is to improve the proficiency of cost calculation and forecasting in pandemic risk management. The 2009 A/H1N1 influenza pandemic has generated additional data and triggered new studies that open debate over the optimal strategy for handling a pandemic. A point of improvement for the risk analysis of such crises that is often mentioned in lessons-learned documents from the World Health Organization and governments is the need for cost estimation of the pandemic response. The assessment of costs during a pandemic poses particular problems related to the appropriate modeling of the characteristic of the virus and the direct effects of an intervention and its impact on costs. Further difficulties arise when trying to relate those costs to overall societal welfare, such as choosing the appropriate societal costs for an intervention or assessing the value of statistical life. In this study, we explore the lessons learned and innovation emerging from the past crisis, with a focus on studies covering high-income countries. We review a number of academic studies and organizational documents that provide cost-effectiveness or cost-benefit analyses for A/H1N1 pandemic interventions since 2009. Our comparative analysis reviews each study's type of intervention, epidemiological model, type of costs included and cost-utility results with a possible conversion to cost-benefit. The result is an extensive reflection on the parameters that may drive the pandemic costs and the appropriate response, which is unique to our knowledge in both the breadth of coverage and the novelty of selected studies. At the cross-disciplinary level, this study stresses the need for an economic efficiency analysis in the risk governance process to distribute financial resources in the most efficient way.

2000

Environmental Science & Technology, 2000

Environmental economists measure the monetary value of reduced mortality risk using the "value of a statistical life" (VSL) defined by individuals' preferences for small changes in risk and income. The theoretical foundation and empirical methods for estimating VSL and its dependence on age, income, baseline mortality risk, and latency of the risk to be altered are reviewed.

2009

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

2012

International Journal of Business Continuity and Risk Management

During recent years advocates of the so-called "J-Value" approach to the valuation of safety have made vigorous attempts to persuade UK government and related agencies to adopt the approach as the basis for the appraisal of proposed safety projects. In particular, advocates of the approach argue that the Value of Preventing a Statistical Fatality (VPF) employed by the Department for Transport, the Health and Safety Executive and other UK public sector bodies is too low and should be replaced with the higher value of safety that its advocates claim is implied by the J-Value model. However, a recent review of the J-Value literature commissioned by the UK Health and Safety Executive concluded that the model underpinning the J-Value approach is "too simplistic" to warrant its use as the basis for public sector safety project appraisal. Amongst other things, the review argues that the approach's exclusive focus on the impact of a safety improvement on the remaining life expectancy of those who benefit from the improvement is too narrow to capture adequately the effect of all of the key factors that should be considered in determining the value of a safety improvement. The purpose of this paper is to consider this and other basic limitations of the J-Value approach in more detail. ______________________________________________________________________ Under the standard definition, the Value of Preventing a Statistical Fatality (VPF)-or, as it is alternatively referred to, the Value of Statistical Life (VSL)-is the sum total of the amounts that a large group of individuals would each currently be willing to pay for small reductions in their own risk of death which, taken over the group affected, would reduce the expected number of premature fatalities during the coming year by one and would hence prevent one "statistical fatality" 1 .