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NewExt: WP2 Mortality Risk Valuation - Results and uses for Externe

NewExt: WP2 Mortality Risk Valuation - Results and uses for Externe. University of Bath Project Meeting May 26th, 2003 PSI. UK WTP Estimates (Full parametric model -Weibull distribution). Key questions to ask of results.

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NewExt: WP2 Mortality Risk Valuation - Results and uses for Externe

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  1. NewExt: WP2 Mortality Risk Valuation- Results and uses for Externe University of BathProject Meeting May 26th, 2003 PSI

  2. UK WTP Estimates(Full parametric model -Weibull distribution)

  3. Key questions to ask of results • What is the effect of age on WTP for reductions in one’s own risk of death? • What is the effect of health on WTP for reductions in one’s own risk of death? • How is WTP affected by latency?

  4. Annual value of statistical life (Euro) with immediate risk reduction

  5. WTP Regression results (5:1000 immediate) • Age • no association between respondent age and WTP • baseline risk not significantly associated with WTP But • expected years to live is +ve and significant • “probability of living to 70” and “age respondents expect to die” variables also +ve and significant

  6. WTP Regression results(5:1000 immediate) • Higher education levels associated with lower WTP • Higher income associated with higher WTP • Own chronic illness associated with higher WTP, though illness in family associated with lower WTP

  7. WTP Regression results (5:1000 immediate) • WTP lower if respondents doubted effectiveness of product • WTP lower for respondents did not think whether they could afford the product

  8. WTP (5:1000 future)

  9. WTP Regression (5:1000 future) • WTP for future risk reduction increases with (log) chance of surviving to 70 • WTP for future risk reduction decreases when respondent thinks their health will be worse in future • Other variables not significant

  10. Results: WTP Values (Euro)

  11. ExternE Requirements • Air pollution context • epidemiological results only allow quantification of loss of life expectancy (LLE) • epidemiology suggests elderly in health most likely to be vulnerable to premature death from air pollution •  need to convert WTP for risk  to LLE

  12. Risk change - LLE conversion • Intuitively, if survival probability in future time periods rises, result will be rise in life expectancy - conversions made by Ari.

  13. Value of Life Years Lost (Euro)

  14. Policy Relevance of VLYL • Epidemiology suggests AQ policy of permanent change of 10ug/m3 of PM2.5 results in 6 month rise in life expectancy • Implied central values for 6 month rise in LE are: • contemporaneous risk: Euro 3,950 • latent risk: Euro 2,505

  15. Outstanding issues • EU policy context: need pooled results to finalise recommended values • Extensions of existing methodology • small-scale testing of 2 variants in France • change “product” to “public health programme” • change risk reduction to increase in life expectancy

  16. French Variants • change “product” to “public health programme” • Because, e.g.: • culture of free medical treatment in EU means respondents have difficulty in understanding health actions in terms of costs

  17. public health programme WTP (Euro)

  18. French Variants • change risk reduction to increase in life expectancy • Because: • respondents may not understand probabilities • want toavoidhaving to mak eartificial conversion between WTP for risk change and LE change

  19. Change risk reduction to increase in life expectancy

  20. French extensions

  21. French extensions

  22. Future Work • Provide final values for ExternE from pooled data • Estimate direct WTP values for appropriate changes in life expectancy - NEEDS?

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