Issue № 82. October 2020

Value of Statistical Life: Pandemic Lessons

PhD, Head of Laboratory for Social and Economic Regulation Problems, Institute of Control and Supervision, Russian Presidential Academy of National Economy and Public Administration, Moscow, Russian Federation.
E-mail: ponomareva-ea@ranepa.ru
ORCID ID: 0000-0003-0489-3961

Making decisions in most cases is accompanied by the need to conduct a cost-benefit analysis. Often, however, difficulties of conducting such an analysis is linked to the impossibility of direct estimation of public regulation effects, especially in situations involving damage to the life and health of citizens. In this case, indirect methods of estimation should be used. One of the most frequently used solutions is to use the notion of the so-called value of statistical life (VSL) and methods of its evaluation. In the context of pandemics, these estimates are particularly relevant because they allow for informed regulatory decisions. The purpose of the research is to obtain estimates of the value of statistical life, including using various methods of analysis — trade-off method, defensive expenditure method, as well as other methods that allow revealing public preferences, including from the point of view of various economic agents, which could be used for making further decisions in the field of public administration, including minimization of negative consequences of coronavirus of a new type. The present research provides an analysis of the world practice of value of statistical life estimation, on the basis of which general methodological approaches are defined. In the practical part there are own VSL estimations based on data concerning the work of the health care system and decisions made during the period of coronavirus pandemic of a new type in Russia from the point of view of patients, medical workers and state. The received value of statistical life estimates can be used for analyzing benefits of repeated quarantine measures, assessments of state construction expediency of medical institutions and the policy aimed at attracting highly qualified medical specialists to Russia.

Keywords

State decision making, estimation of state decision making, value of statistical life (VSL), cost-benefit analysis, trade-off method, willingness-to-accept (WTA), travel cost method, damage of life compensation, COVID-19, pandemic.

DOI: 10.24411/2070-1381-2020-10104