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Society For Risk Analysis Annual Meeting 2008

Risk Analysis: the Science and the Art

Session Schedule & Abstracts

* Disclaimer: All presentations represent the views of the authors, and not the organizations that support their research. Please apply the standard disclaimer that any opinions, findings, and conclusions or recommendations in abstracts, posters, and presentations at the meeting are those of the authors and do not necessarily reflect the views of any other organization or agency. Meeting attendees and authors should be aware that this disclaimer is intended to apply to all abstracts contained in this document. Authors who wish to emphasize this disclaimer should do so in their presentation or poster. In an effort to make the abstracts as concise as possible and easy for meeting participants to read, the abstracts have been formatted such that they exclude references to papers, affiliations, and/or funding sources. Authors who wish to provide attendees with this information should do so in their presentation or poster.

Common abbreviations

T3-E Valuing Health Risks I: Types of Death Room: Commonwealth B   2:00-3:30 PM

Chair(s): Lisa Robinson, Jim Hammitt

T3-E.1  14:00  Benefits Transfer of VSL in an Air Pollution Context: Can Expert Elicitation Help? Roman HA*, Stieb D, Walsh TL, Hammitt JK; Industrial Economics, Inc. (1 and 3), Health Canada (2), Harvard School of Public Health (4)   hroman@indecon.com Abstract: Analyses of the health benefits of air pollution rules are typically dominated by the monetized value of avoided premature mortality; therefore characterization of the uncertainty surrounding these estimates is critical to good policymaking. Formal expert judgment elicitation methods have been successfully applied to characterize uncertainty in one key input to these estimates -- the concentration-response relationship linking particulate air pollution with mortality (see Roman et al., 2008 and Cooke et al., 2007). However, the usefulness of expert elicitation methods to characterize the valuation part of the mortality benefits equation has yet to be explored. Health Canada has sponsored a pilot expert judgment study to elicit quantitative probabilistic judgments of uncertainties in Value-of-Statistical-Life (VSL) estimates when applied in an air pollution context. The study focuses on uncertainties related to benefits transfer of published VSL estimates to populations affected by changes in air pollution. This includes uncertainties related to the effects of demographic characteristics such as age, income, and health status on VSL as well as the impact of factors such as risk perception. The ultimate goal of this project is to develop quantitative probabilistic representations of uncertainty in VSL that can be incorporated into Health Canada's Air Quality Benefits Assessment Tool (AQBAT).

T3-E.2  14:20  Valuing Mortality Risk Reductions for Environmental Policy . Dockins C*, Maguire K, Simon N; US Environmental Protection Agency   simon.nathalie@epa.gov Abstract: Reductions in mortality risk constitute the largest quantifiable benefits category of many of EPA’s regulations. As such, mortality risk valuation estimates are an important input to most of the Agency’s benefit-cost analyses. EPA has used the same central default value of $4.8 million (1990$), adjusted for inflation, per death averted in most of its primary analyses since the Agency last updated its Guidelines for Preparing Economic Analyses. EPA is now revising its guidance on such estimates as the literature has grown considerably since its default estimate was derived and several EPA-funded reports have raised issues about the robustness of published estimates. EPA recently sought advice from its Science Advisory Board Environmental Economics Advisory Committee (SAB-EEAC) on the use of meta-analysis to derive VSL estimates as well as the underlying construct of such estimates. This paper presents one response to the SAB-EEAC recommendations. Here, we derive a central VSL focused on stated preference (SP) studies. Following an in-depth literature search of all recent SP studies on mortality risk, we apply selection criteria to narrow the list of estimates for our VSL derivation. In developing the database for analysis we include all estimates presented in each underlying study. Using our set of selected estimates, we apply various techniques to summarize the results and derive a central estimate and range of estimates. These include fitting a distribution to the set of estimates and using econometric analysis to account for underlying differences in study characteristics. The results of this research will help inform future analysis of the VSL literature with the goal of updating EPA’s mortality risk valuation practices.

T3-E.3  14:40  Valuing mortality risk reductions for homeland security rules. Robinson LA*; Consultant   lisa.a.robinson@comcast.net Abstract: Similar to other Federal regulatory agencies, the Department of Homeland Security requires estimates of the value of mortality risk reductions for use in assessing the benefits of its rules. The value per statistical life (VSL) estimates applied by other agencies may not be entirely appropriate in this context, however. Other Federal agencies address risks that often affect different subpopulations. In addition, the risks associated with terrorist attacks are likely to be viewed with substantially more dread, as more ambiguous, and as less voluntary and controllable than most risks considered by other regulatory agencies. Recent expert panel advice and new research also has not yet been fully incorporated into these approaches. This presentation will summarize the results of a project conducted for U.S. Customs and Border Protection in the Department of Homeland Security. The project uses the benefit transfer framework to develop an approach for valuing homeland security mortality risk reductions, involving a panel of experts. The presentation will first discuss the conceptual framework, and then summarize the VSL estimates applied by different U.S. agencies. It will review and evaluate different sources of VSL estimates, including available meta-analyses and individual revealed and stated preference studies. In addition, it will discuss the recent theoretical and empirical evidence on the effects of differences between the populations and risks studied and those addressed by homeland security rules. It will conclude by describing the implications of this project for the values used in related regulatory analyses.

T3-E.4  15:00  Discrete Choice Experiments: False Friends for Valuing Mortality Risk? Rheinberger CM*; WSL Swiss Federal Institute for Snow and Avalanche Research   rheinberger@slf.ch Abstract: Discrete Choice Experiments (DCE) have been increasingly used to elicit preferences for risk reductions in public health and safety programs. These stated-preference methods aim at valuing reductions in mortality risk by estimating the marginal rate at which individuals would trade off their money against small changes in their likelihood to die within a specified time period. This trade-off rate, commonly termed the value of statistical life (VSL), is widely used as policy guideline in cost-benefit analyses. To estimate the VSL, DCE-respondents are asked to choose among hypothetical risk reduction programs. The attributes of these programs describe their most important features, including their reduction in risk and their individual costs. However, concerns have been raised about the validity of stated-preference studies, as difficulties in explaining small risk changes to survey respondents may affect their choices. While we share some of these concerns, we raise another issue that might impact the valuation of risk reductions in DCE: the framing of risk. This paper analyzes, whether risk framing impacts DCE-based VSL-estimates. We conducted a survey-based experiment that asked about 450 people from Switzerland about their willingness-to-pay for safety against avalanches, rock falls and ordinary car accidents on Alpine roads. Half of the respondents was asked how much they would be willing to pay for the reduction of up to 16 fatalities per year in reference to the Swiss residential population; the other half was presented with identical decisions except that the avoided fatalities were framed in reference to the annual number of fatal car accidents. The results suggest that the framing of risk reductions impacts the willingness-to-pay. Since VSL-estimates may significantly vary with different risk framings, this has further implications for the use of DCE in cost-benefit analysis.

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