1 / 29

Session 10B From Diye to Value of Statistical Life: A Case Study for the Islamic Republic of Iran

Session 10B From Diye to Value of Statistical Life: A Case Study for the Islamic Republic of Iran. Morteza Rahmatian California State University, Fullerton mrahmatian@fullerton.edu Ashgabad, November, 2005. This paper present VSL obtained in several approaches:. Diye Human Capital Approach

marek
Télécharger la présentation

Session 10B From Diye to Value of Statistical Life: A Case Study for the Islamic Republic of Iran

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Session 10BFrom Diye to Value of Statistical Life: A Case Study for theIslamic Republic of Iran Morteza Rahmatian California State University, Fullerton mrahmatian@fullerton.edu Ashgabad, November, 2005

  2. This paper present VSL obtained in several approaches: • Diye • Human Capital Approach • Contingent Valuation Method 4. Quality of Well Being (QWB) 5. Income Elasticity Approach 6. Miller Approach Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  3. Diye is referred to a form of financial compensation to be paid by the perpetrator to the victim’s family. Diye would seem to fall somewhere between the modern-day valuation frameworks set up by the human capital approach and the theoretically more complete WTP approach. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  4. Diye Since the monetary value of most of the products designated in Diye fluctuates, we choose to focus on the one item whose value is easy to determine - the Dinar, whose value is based on gold. With 2003 gold prices set at $363.38 per ounce, the value of 1,000 Dinars thus becomes: Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  5. Diye (3,515 grams)(0.035274 oz/g)($363.38/oz) = $45,055. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  6. Human Capital Approach (HCA) Considering a worker of average age in Tehran (37 years, which is based on our sample), a retirement age of 62, and a yearly real wage of $1800, an estimate of $ 45,000 results. HCA VSL = $45,000 Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  7. VSL Using CVM Contingent Valuation Method (CVM) was utilized to estimate monetary values for the avoidance of certain health symptoms (including the reduction in the probability of dying prematurely) in the Greater Tehran Area. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  8. VSL using CVM Respondents were asked: “If you were placed in a hypothetical market and were able to purchase avoidance of any of the listed symptoms, given your budget constraint, please identify your willingness to pay for avoiding one day of these symptoms.” Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  9. VSL Using CVM Respondents were further asked to place a dollar value on the possibility of reduction in death rate by one in one thousand. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  10. Characteristics of the respondents Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  11. VSL Using CVM The mean and median bids for a one in 1,000 reduction in the probability of dying prematurely are 35,000 and 15,000 Toman, respectively. Using the median survey responses results in a VSL of $66,750. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  12. Quality of Well Being (QWB) Drawing on work by French and Mauskopf (1992) and by Johnson et al. (1997), we make use of a health-status index to link morbidity WTP values to mortality WTP numbers. Specifically, we perform the following steps to arrive at our VSL estimates: Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  13. Quality of Well Being (QWB) 1. Convert our WTP survey results into PPP-adjusted U.S. dollars. 2. For each health effect, determine the number of Quality-Adjusted Life-Days lost, using health index numbers developed by Johnson et al. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  14. Quality of Well Being (QWB) • Calculate a range of estimates for the Value of a Quality-Adjusted Life-Year (QALY). 4. Combine the value of a QALY with life-years remaining to derive the VSL. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  15. Mean and Median Bids for Symptom Avoidance (in Rials) Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  16. Quality of Well Being (QWB) First, the WTPs (expressed in Rials) are expressed into US dollars, using the exchange rate of 8000 Rials = $1. Using the purchasing power parity (PPP) the symptom avoidance are valued from $1.33 (to avoid a day of sore throat) to $3.56 (to avoid a day with Irregular Heartbeat).

  17. Quality of Well Being (QWB) French and Mauskopf (1992) developed an approach for using health-status indexes to derive WTPs for specific symptoms (such as cough, headache, and asthma) from the value of a statistical life. Here, we "reverse the process" to derive an estimate of the VSL from our reported WTP values for specific symptoms. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  18. Quality of Well Being (QWB) Quality of Well-Being index provides a quantitative measure of the perceived severity of specific health conditions, on a scale ranging from 0 (death) to 1 (perfect health). By subtracting a symptom's QWB from one, the portion of the "day lost" due to the symptom is inferred. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  19. Quality of Well Being (QWB) Combining the WTP for avoiding a day with a particular symptom with its QWB index number, it becomes a simple matter to infer the value of a Quality-Adjusted Life-Year (QALY). Value of 1 Life -Year = (WTP for Avoiding 1 day with symptom * 365)/ (Days Lost) For instance, using mild cough value of a QALY to be [($1.78)*365 / 0.257] = $2,528. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  20. Life Days Lost and Value of Life (in US $) Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  21. Quality of Well Being (QWB) • $VSL = ($QALY) x (Life-Years Remaining) Based on average age of our survey respondents (37), and the Iranian life expectancy of 69 years, 32 years of life remaining for an "average" survey respondent Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  22. Quality of Well Being (QWB) The VSL ranges from $58,236 to $141,569, with an average value of $ 99,333. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  23. Income Elasticity Approach Bowland and Beghin (2001) is an attempt to estimate VSL for developing countries by using information from the industrialized nations. This equation accounts for differences in risk, human capital levels, and income. Their work also led to the estimation of an income elasticity of WTP for reductions in the probability of premature mortality. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  24. Income Elasticity Approach The elasticity, which Bowland and Beghin estimated ranges from 1.52 to 2.27: WTPA = WTPB (INCA / INCB )ε Where the A and B subscripts denote two different countries, WTP is the willingness to pay for a particular health effect (value of avoiding premature death), and INC denotes the per capita income in each nation. The ε is the income elasticity of WTP. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  25. Income Elasticity Approach To estimate ε for Iran, we use the Bowland-Beghin equation, along with our Iranian VSL. Assuming a US VSL of $6 million, PPP-adjusted per capita income for the 2 countries, and the range of VSL estimates derived from our study, ε = 2.44 Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  26. Income Elasticity Approach This values is compatible with Bowland and Beghin's predicted range for ε. This values falls slightly outside Bowland and Beghin's predicted range for ε, giving further support to the validity of our morbidity-based VSL estimation procedure. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  27. VSL using the Miller approach. • Ted R. Miller evaluated the value of statistical life from 68 studies spread over 13 countries. • Miller concluded that the value of statistical life for any country is typically about 120 times GDP per capita. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  28. Conclusions Diye is very close to the value obtained using the human capital approach. (Lower Bound) CVM on mortality valuation, results in a VSL which is about 50 percent higher than Diye/human capital number. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

  29. Conclusions CVM on morbidity results in VSL of nearly $100,000 with an income elasticity of 2.44. These estimates are consistent with values reported in other recent valuation studies for developing countries. We speculate that peoples’ attitudes toward the value of avoiding premature death, as captured by our WTP mortality survey, are strongly influenced by the long-held Diye tradition. Caspian EVE 2005/UNDP and WBI Morteza Rahmatian, From Diye to VSL

More Related