Defining the value of a statistical life: a comment

Area of Science:

• Health Economics
• Risk Assessment
• Public Policy

Background:

• Critiques the theoretical definition of the value of a statistical life (VSL).
• Addresses claims that common VSL definitions and empirical estimates are biased.
• Introduces an alternative theoretical VSL concept incorporating risk into budget constraints.

Discussion:

• Argues for a theoretically correct VSL concept distinct from Johansson's.
• Demonstrates how individual risk of death impacts lifetime budget constraints.
• Contends that the intuitive VSL definition aligns with a robust theoretical framework.

Key Insights:

• The intuitive definition of VSL is theoretically consistent.
• A revised VSL concept integrates individual risk perception.
• Empirical VSL estimates can reliably inform mortality-reducing project valuation.

Outlook:

• Re-evaluates the foundation for economic valuation of life-saving interventions.
• Supports the use of established VSL metrics in policy decisions.
• Highlights the importance of theoretical rigor in applied health economics.