Value per Statistical Life at the Sub-National Level as a Tool for Assessing Public Health and Environmental Problems

Abstract

This article aims to estimate the Value per Statistical Life (VSL) and Value per Statistical Life Year (VSLY) at the sub-national level, which can be used to calculate the economic impact of health and environmental problems. We estimate the value of life for Mexico and its 32 states, grouped into 5 regions for 2021. We used the OECD's guidelines on "Mortality Risk Valuation in Environment, Health and Transport Policies," which applies the measure of Willingness to Pay (WTP) and Cost-Benefit Analysis (CBA). Mexico's overall VSL of $2 000 000 USD in 2021 showcases the value placed on human life. The variation in VSL across the 32 states, with Chiapas having the lowest VSL of $400 000 USD and Mexico City boasting the highest VSL of $3 300 000 USD highlights the different levels of regional development and people's willingness to pay to reduce the risk of mortality. Our estimates of VSL and VSLY have the potential to contribute to the evaluation of public policies in the fields of health and the environment. Monetizing human life through these estimates can offer valuable insights to policymakers at both the national and sub-national levels. By quantifying the economic value placed on human life, this paper helps decision-makers prioritize investments, assess the cost-effectiveness of interventions, and allocate resources to maximize societal well-being.

Keywords: Value of Life; Value per Statistical Life; Value per Statistical Life Years; environmental policy; public health.

Figure 1.

Example calculation of mortality risk reduction benefit. Note. To calculate the mortality risk reduction benefits, the procedure of Robinson et al. was followed, making the corresponding adaptations for the state of Baja California, Mexico.

Figure 2.

Example of VSLY calculation versus VSL. Note. As an example of VSLY versus VSL calculation, data from the state of Aguascalientes Mexico were used, following the procedure of Robinson et al.