Value of a statistical life in road safety: a benefit-transfer function with risk-analysis guidance based on developing country data

Unraveling preference heterogeneity in willingness-to-pay for enhanced road safety: A hybrid approach of machine learning and quantile regression

Investing in road safety enhancement programs highly depends on the economic valuation of road traffic accidents and their outcomes. Such evaluation underpins road safety interventions in cost-benefit analysis. To this end, understanding and modeling public willingness-to-pay for enhanced road safety have received significant attention in the past few decades. However, despite considerable modeling efforts, some issues still persist in earlier studies, namely, (i) using standard regression approaches that assume a homogeneous impact of explanatory variables on willingness-to-pay, not accounting for heterogeneity, and depends on a priori distribution of the dependent variable, and (ii) the absence of higher-order interactions from models, leading to omitted variable bias and erroneous model inferences. To overcome this critical research gap, our study proposes a new modeling framework, integrating a machine learning technique (decision tree) to identify a priori relationships for higher-order interactions and a quantile regression model to account for heterogeneity along the entire range of willingness-to-pay. The proposed framework examines the determinants of willingness-to-pay for enhanced road safety using a sample of car drivers from Peshawar, Pakistan. Modeling results indicate that variables not significant in a linear model become significant at specific quantiles of the willingness-to-pay distribution. Further, including higher-order interactions among the explanatory variables provides additional insights into the complex relationship between willingness-to-pay and its determinants. In addition, willingness-to-pay for fatal and severe injury risk reductions is estimated at different quartiles and used to calculate the values of corresponding risk reductions. Overall, the proposed framework provides a better understanding of public sensitivities to willingness-to-pay for enhanced road safety.

Quantitative Analysis of the Social Costs of Road Traffic Crashes Literature

Despite recent improvements in tackling road safety challenges, particularly in developed countries, road traffic crashes account for 1.35 million deaths annually and cost over 65 us$ billion. This paper reviews the existing socio-economic costs literature, highlights research gaps, and draws attention to the lack of analysis in developing countries, which account for 90% of the fatalities. We rely on both simple descriptive analyses and formal econometric analyses. Our descriptive results show an upward trend over the recent years, mostly in high and middle-income countries. The paper focuses on the differences in estimating the socio-economic costs of road traffic crashes using two popular methodologies, the willingness-to-pay (wtp) and the human capital (hc). Our econometric analysis shows that papers that use wtp tend to compute the impact as a percentage of gdp that is on average ̃1% higher than those that use the hc approach. Likewise, studies using the human capital method tend to underestimate the total socio-economic costs by a factor of two compared to the cost derived from the wtp approach; this gap then reduces substantially when accounting for population density, countries' income levels, and road safety outcomes. Further, the paper stresses the underreporting problem and the inexistence of a mechanism to reasonably account for it in socio-economic costs calculations. The paper concludes by advocating for more studies focusing on low and middle-income countries using a combination of common approaches with other valuation methods.

Estimating, and setting targets for, the resilience of transport infrastructure

To ensure that transport infrastructure provides acceptable levels of service with respect to extreme events, the resilience of the infrastructure needs to be estimated and targets for it need to be set. In this paper, the methodology proposed in the Foresee EU research project is presented. The methodology allows managers to measure, and set targets for, the resilience of transport systems in all situations. It requires clear definition of the transport system and how the service provided and the resilience are to be measured. The methodology allows consideration of the fact that transport infrastructure managers need to estimate resilience with various degrees of accuracy depending on the specific problem to be addressed, the time frame at disposition and the expertise available. These various levels of accuracy are covered by proposing the use of (a) simulations, (b) indicators whose values are directly related to increases in expected restoration intervention costs and reductions in service, and (c) the percentage of fulfilment of indicators. Once resilience has been estimated, the methodology provides guidance on how to set resilience targets with or without cost–benefit analysis. For demonstration, the explanation of the steps of the guideline is supported by their use for a simple transport system.

How Much Is a Human Life Worth? A Systematic Review

OBJECTIVES

To systematically review studies eliciting monetary value of a statistical life (VSL) estimates within, and across, different sectors and other contexts; compare the reported estimates; and critically review the elicitation methods used.

METHODS

In June 2019, we searched the following databases to identify methodological and empirical studies: Cochrane Library, Compendex, Embase, Environment Complete, Informit, ProQuest, PubMed, Scopus, and Web of Science. We used the Preferred Reporting Items for Systematic Reviews and Meta-analyses guidelines for reporting and a modified Consolidated Health Economic Evaluation Reporting Standards checklist to assess the quality of included studies.

RESULTS

We identified 1455 studies, of which we included 120 in the systematic review. A stated-preference approach was used in 76 articles, with 51%, 41%, and 8% being contingent valuation studies, discrete-choice experiments, or both, respectively. A revealed-preference approach was used in 43 articles, of which 74% were based on compensating-wage differentials. The human capital approach was used in only 1 article. We assessed most publications (87%) as being of high quality. Estimates for VSL varied substantially by context (sector, developed/developing country, socio-economic status, etc), with the median of midpoint purchasing power parity-adjusted estimates of 2019 US$5.7 million ($6.8 million, $8.7 million, and $5.3 million for health, labor market, and transportation safety sectors, respectively).

CONCLUSIONS

The large variation observed in published VSLs depends mainly on the context rather than the method used. We found higher median values for labor markets and developed countries. It is important that health economists and policymakers use context-specific VSL estimates. Methodological innovation and standardization are needed to maximize comparability of VSL estimates within, and across, sectors and methods.

Systematic Review to Update 'Value of a Statistical Life' Estimates for Australia

The value of a statistical life (VSL) estimates individuals’ willingness to trade wealth for mortality risk reduction. This economic parameter is often a major component of the quantified benefits estimated in the evaluation of government policies related to health and safety. This study reviewed the literature to update the VSL recommended for Australian policy appraisals. A systematic literature review was conducted to capture Australian primary studies and international review papers reporting VSL estimates published from 2007 to January 2019. International estimates were adjusted for income differences and the median VSL estimate was extracted from each review study. VSL estimates were used to calculate the value of a statistical life year. Of the 18 studies that met the inclusion criteria, two studies were primary Australian studies with a weighted mean VSL of A$7.0 million in 2017 values. The median VSL in the review studies was A$7.3 million. For Australian public policy appraisals, we recommend the consideration of a base case VSL for people of all ages and across all risk contexts of A$7.0 million. Sensitivity analyses could use a high value of A$7.3 million and a low value that reflects the value (A$4.3 million) currently recommended by the Australian government.

Defining and quantifying railway service to plan infrastructure interventions

Railway networks are constructed, maintained and developed to provide service to stakeholders. The timing of infrastructure interventions depends on the costs of intervening and the risks of not intervening. Determining the optimal trade-off requires a rigorous definition of the service provided and a way to quantify it. In this paper, such a definition and method of service quantification for the railway infrastructure is provided. Service is defined as a function of how every stakeholder is affected by the changes in the state of the railway infrastructure. It is quantified by estimating the value of each unit of service provided. This definition of service enables the quantification of railway service for all the affected stakeholders when the infrastructure state improves – for example, due to maintenance – or deteriorates – for example, due to fatigue.

The global macroeconomic burden of road injuries: estimates and projections for 166 countries

BACKGROUND

Road injuries are among the ten leading causes of death worldwide and also impede economic wellbeing and macroeconomic performance. Beyond medical data on the incidence of road injuries and their resulting morbidity and mortality, a detailed understanding of their economic implications is a prerequisite for sound, evidence-based policy making. We aimed to determine global macroeconomic costs of road traffic injuries and their cross-country distribution.

METHODS

We calculated the economic burden of all road traffic-related injuries for 166 countries by use of a macroeconomic model that accounts for the effect of fatal and non-fatal injuries on labour supply, age-specific differences in education and experience of those who are affected by road accidents, and the diversion of injury-related treatment expenses from savings, which results in lower investment.

FINDINGS

We estimated that road injuries will cost the world economy US$1·8 trillion (constant 2010 US$) in 2015-30, which is equivalent to an annual tax of 0·12% on global gross domestic product. Although low-income and middle-income countries have the largest health burden, their share of the economic burden of road injuries is only 46·4% of the global loss, reflecting in part higher productivity (and earnings) in high-income countries, but also prominently higher treatment costs. Our results also indicate that treatment costs account for a greater proportion of the economic burden in high-income countries than in low-income countries.

INTERPRETATION

The macroeconomic burden of road injuries is sizeable and distributed unequally across countries and world regions. This finding suggests a case for nuanced policy making. Our framework should provide a good starting point for the more detailed analysis of policies both at country level and across different countries.

FUNDING

National Institute on Aging.

zDALY: An adjusted indicator to estimate the burden of zoonotic diseases

The burden of human diseases in populations, or for an individual, is frequently estimated in terms of one of a number of Health Adjusted Life Years (HALYs). The Disability Adjusted Life Year (DALY) is a widely accepted HALY metric and is used by the World Health Organization and the Global Burden of Disease studies. Many human diseases are of animal origin and often cause ill health and production losses in domestic animals. The economic losses due to disease in animals are usually estimated in monetary terms. The monetary impact on animal health is not compatible with HALY approaches used to measure the impact on human health. To estimate the societal burden of zoonotic diseases that have substantial human and animal disease burden we propose methodology which can be accommodated within the DALY framework. Monetary losses due to the animal disease component of a zoonotic disease can be converted to an equivalent metric using a local gross national income per capita deflator. This essentially gives animal production losses a time trade-off for human life years. This is the time required to earn the income needed to replace that financial loss. This can then be assigned a DALY equivalent, termed animal loss equivalents (ALE), and added to the DALY associated with human ill health to give a modified DALY. This is referred to as the "zDALY". ALEs could also be estimated using willingness-to-pay for animal health or survey tools to estimate the replacement time value for animals with high societal or emotional value (for example pets) that cannot be calculated directly using monetary worth. Thus the zDALY estimates the impact of a zoonotic disease to animal and human health. The losses due to the animal disease component of the modified DALY are straightforward to calculate. A number of worked examples such as echinococcosis, brucellosis, Q fever and cysticercosis from a diverse spectrum of countries with different levels of economic development illustrate the use of the zDALY indicator.

Estimating the value of life and injury for pedestrians using a stated preference framework

INTRODUCTION

The incidence of pedestrian death over the period 2010 to 2014 per 1000,000 in North Cyprus is about 2.5 times that of the EU, with 10.5 times more pedestrian road injuries than deaths. With the prospect of North Cyprus entering the EU, many investments need to be undertaken to improve road safety in order to reach EU benchmarks.

METHOD

We conducted a stated choice experiment to identify the preferences and tradeoffs of pedestrians in North Cyprus for improved walking times, pedestrian costs, and safety. The choice of route was examined using mixed logit models to obtain the marginal utilities associated with each attribute of the routes that consumers chose. These were used to estimate the individuals' willingness to pay (WTP) to save walking time and to avoid pedestrian fatalities and injuries. We then used the results to obtain community-wide estimates of the value of a statistical life (VSL) saved, the value of an injury (VI) prevented, and the value per hour of walking time saved.

RESULTS

The estimate of the VSL was €699,434 and the estimate of VI was €20,077. These values are consistent, after adjusting for differences in incomes, with the median results of similar studies done for EU countries. The estimated value of time to pedestrians is €7.20 per person hour.

CONCLUSIONS

The ratio of deaths to injuries is much higher for pedestrians than for road accidents, and this is completely consistent with the higher estimated WTP to avoid a pedestrian accident than to avoid a car accident. The value of time of €7.20 is quite high relative to the wages earned.

PRACTICAL APPLICATIONS

Findings provide a set of information on the VRR for fatalities and injuries and the value of pedestrian time that is critical for conducing ex ante appraisals of investments to improve pedestrian safety.

Disability-adjusted life years and economic cost assessment of the health effects related to PM2.5 and PM10 pollution in Mumbai and Delhi, in India from 1991 to 2015

Particulate air pollution is becoming a serious public health concern in urban cities in India due to air pollution-related health effects associated with disability-adjusted life years (DALYs) and economic loss. To obtain the quantitative result of health impact of particulate matter (PM) in most populated Mumbai City and most polluted Delhi City in India, an epidemiology-based exposure-response function has been used to calculate the attributable number of mortality and morbidity cases from 1991 to 2015 in a 5-year interval and the subsequent DALYs, and economic cost is estimated of the health damage based on unit values of the health outcomes. Here, we report the attributable number of mortality due to PM₁₀ in Mumbai and Delhi increased to 32,014 and 48,651 in 2015 compared with 19,291 and 19,716 in year 1995. And annual average mortality due to PM_2.5 in Mumbai and Delhi was 10,880 and 10,900. Premature cerebrovascular disease (CEV), ischemic heart disease (IHD), and chronic obstructive pulmonary disease (COPD) causes are about 35.3, 33.3, and 22.9% of PM_2.5-attributable mortalities. Total DALYs due to PM10 increased from 0.34 million to 0.51 million in Mumbai and 0.34 million to 0.75 million in Delhi from average year 1995 to 2015. Among all health outcomes, mortality and chronic bronchitis shared about 95% of the total DALYs. Due to PM₁₀, the estimated total economic cost at constant price year 2005 US$ increased from 2680.87 million to 4269.60 million for Mumbai City and 2714.10 million to 6394.74 million for Delhi City, from 1995 to 2015, and the total amount accounting about 1.01% of India's gross domestic product (GDP). A crucial presumption is that in 2030, PM₁₀ levels would have to decline by 44% (Mumbai) and 67% (Delhi) absolutely to maintain the same health outcomes in year 2015 levels. The results will help policy makers from pollution control board for further cost-benefit analyses of air pollution management programs in Mumbai and Delhi.

Country-Level Cost-Effectiveness Thresholds: Initial Estimates and the Need for Further Research

BACKGROUND

Cost-effectiveness analysis can guide policymakers in resource allocation decisions. It assesses whether the health gains offered by an intervention are large enough relative to any additional costs to warrant adoption. When there are constraints on the health care system's budget or ability to increase expenditures, additional costs imposed by interventions have an "opportunity cost" in terms of the health foregone because other interventions cannot be provided. Cost-effectiveness thresholds (CETs) are typically used to assess whether an intervention is worthwhile and should reflect health opportunity cost. Nevertheless, CETs used by some decision makers-such as the World Health Organization that suggested CETs of 1 to 3 times the gross domestic product (GDP) per capita-do not.

OBJECTIVES

To estimate CETs based on opportunity cost for a wide range of countries.

METHODS

We estimated CETs based on recent empirical estimates of opportunity cost (from the English National Health Service), estimates of the relationship between country GDP per capita and the value of a statistical life, and a series of explicit assumptions.

RESULTS

CETs for Malawi (the country with the lowest income in the world), Cambodia (with borderline low/low-middle income), El Salvador (with borderline low-middle/upper-middle income), and Kazakhstan (with borderline high-middle/high income) were estimated to be $3 to $116 (1%-51% GDP per capita), $44 to $518 (4%-51%), $422 to $1967 (11%-51%), and $4485 to $8018 (32%-59%), respectively.

CONCLUSIONS

To date, opportunity-cost-based CETs for low-/middle-income countries have not been available. Although uncertainty exists in the underlying assumptions, these estimates can provide a useful input to inform resource allocation decisions and suggest that routinely used CETs have been too high.

Social costs of road crashes: An international analysis

This paper provides an international overview of the most recent estimates of the social costs of road crashes: total costs, value per casualty and breakdown in cost components. The analysis is based on publications about the national costs of road crashes of 17 countries, of which ten high income countries (HICs) and seven low and middle income countries (LMICs). Costs are expressed as a proportion of the gross domestic product (GDP). Differences between countries are described and explained. These are partly a consequence of differences in the road safety level, but there are also methodological explanations. Countries may or may not correct for underreporting of road crashes, they may or may not use the internationally recommended willingness to pay (WTP)-method for estimating human costs, and there are methodological differences regarding the calculation of some other cost components. The analysis shows that the social costs of road crashes in HICs range from 0.5% to 6.0% of the GDP with an average of 2.7%. Excluding countries that do not use a WTP- method for estimating human costs and countries that do not correct for underreporting, results in average costs of 3.3% of GDP. For LMICs that do correct for underreporting the share in GDP ranges from 1.1% to 2.9%. However, none of the LMICs included has performed a WTP study of the human costs. A major part of the costs is related to injuries: an average share of 50% for both HICs and LMICs. The average share of fatalities in the costs is 23% and 30% respectively. Prevention of injuries is thus important to bring down the socio-economic burden of road crashes. The paper shows that there are methodological differences between countries regarding cost components that are taken into account and regarding the methods used to estimate specific cost components. In order to be able to make sound comparisons of the costs of road crashes across countries, (further) harmonization of cost studies is recommended. This can be achieved by updating and improving international guidelines and applying them in future cost studies. The information regarding some cost components, particularly human costs and property damage, is poor and more research into these cost components is recommended.

Estimating the Value of Life, Injury, and Travel Time Saved Using a Stated Preference Framework

The incidence of fatality over the period 2010-2014 from automobile accidents in North Cyprus is 2.75 times greater than the average for the EU. With the prospect of North Cyprus entering the EU, many investments will need to be undertaken to improve road safety in order to reach EU benchmarks. The objective of this study is to provide local estimates of the value of a statistical life and injury along with the value of time savings. These are among the parameter values needed for the evaluation of the change in the expected incidence of automotive accidents and time savings brought about by such projects. In this study we conducted a stated choice experiment to identify the preferences and tradeoffs of automobile drivers in North Cyprus for improved travel times, travel costs, and safety. The choice of route was examined using mixed logit models to obtain the marginal utilities associated with each attribute of the routes that consumers choose. These estimates were used to assess the individuals' willingness to pay (WTP) to avoid fatalities and injuries and to save travel time. We then used the results to obtain community-wide estimates of the value of a statistical life (VSL) saved, the value of injury (VI) prevented, and the value per hour of travel time saved. The estimates for the VSL range from €315,293 to €1,117,856 and the estimates of VI from € 5,603 to € 28,186. These values are consistent, after adjusting for differences in incomes, with the median results of similar studies done for EU countries.

National mandatory motorcycle helmet laws may save $2.2 billion annually: An inpatient and value of statistical life analysis

BACKGROUND

While statistics exist regarding the overall rate of fatalities in motorcyclists with and without helmets, a combined inpatient and value of statistical life (VSL) analysis has not previously been reported.

METHODS

Statistical data of motorcycle collisions were obtained from the Centers for Disease Control, National Highway Transportation Safety Board, and Governors Highway Safety Association. The VSL estimate was obtained from the 2002 Department of Transportation calculation. Statistics on helmeted versus nonhelmeted motorcyclists, death at the scene, and inpatient death were obtained using the 2010 National Trauma Data Bank. Inpatient costs were obtained from the 2010 National Inpatient Sample. Population estimates were generated using weighted samples, and all costs are reported using 2010 US dollars using the Consumer Price Index.

RESULTS

A total of 3,951 fatal motorcycle collisions were reported in 2010, of which 77% of patients died at the scene, 10% in the emergency department, and 13% as inpatients. Thirty-seven percent of all riders did not wear a helmet but accounted for 69% of all deaths. Of those motorcyclists who survived to the hospital, the odds ratio of surviving with a helmet was 1.51 compared with those without a helmet (p < 0.001). Total costs for nonhelmeted motorcyclists were 66% greater at $5.5 billion, compared with $3.3 billion for helmeted motorcyclists (p < 0.001). Direct inpatient costs were 16% greater for helmeted riders ($203,248 vs. $175,006) but led to more than 50% greater VSL generated (absolute benefit, $602,519 per helmeted survivor).

CONCLUSION

A cost analysis of inpatient care and indirect costs of motorcycle riders who do not wear helmets leads to nearly $2.2 billion in losses per year, with almost 1.9 times as many deaths compared with helmeted motorcyclists. The per capita cost per fatality is more than $800,000. Institution of a mandatory helmet law could lead to an annual cost savings of almost $2.2 billion.

LEVEL OF EVIDENCE

Economic analysis, level III.

Valuation of safety under reference-dependent evaluation of income

We analyze data of a Spanish nationally-representative survey where subjects reported their willingness to pay (WTP) for road safety improvements, specifically they hypothetically paid for a reduction of the risk of a road fatality and several injuries. Respondents also reported their current income (CI) and permanent income (PI). The latter refers to their normal income once they considered various stages of low/high earnings throughout their entire lives. Consequently, we define relative income as the comparison of CI with respect to PI. Three income frames are generated as explanatory variables: gain (with CI>PI); neutral (with CI=PI); and loss scenario (with CI<PI). Surprisingly, we find that conditional on current income, and on a set of characteristics, those respondents in gain frame reported higher WTP than those in neutral and loss scenario. Further analysis shows that the income frames effect is higher and more significant for the older half-sample (>45), being about three or four times higher than for the younger subset. Possible interpretations of the role of PI as a reference point are considered given the results. A reference-dependent utility function of income, where PI is the reference point, is proposed to describe the monetary valuation of safety within the theoretical framework previously developed in the safety economics literature.