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Skills of the trade: valuing health risk reductions in benefit-cost analysis

Published online by Cambridge University Press:  19 January 2015

Lisa A. Robinson
Affiliation:
Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School, USA
James K. Hammitt
Affiliation:
Harvard University (Center for Risk Analysis), USA and Toulouse School of Economics (LERNA-INRA), France
Corresponding

Abstract

Many public policies and private actions affect the risk of injury, illness, or death, yet changes in these risks are not easily valued using market prices. We discuss how to value these risk reductions in the context of benefit-cost analysis. We begin with a pragmatic focus, describing the analytic framework and the approaches currently used for valuation, including estimates of willingness to pay, cost of illness, and monetized quality-adjusted life years. We then turn to some conceptual issues that illustrate areas in need of further exploration.

Type
Article
Copyright
Copyright © Society for Benefit-Cost Analysis 2013

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