Question

Most empirical estimates of the value of a life saved are based upon wage rate differentials across industries that have different rates of fatalities from occupational hazards. Do you think that industrial risk/wage estimates are a reasonable metric for estimating the value of reduced mortality risks from environmental pollution? If not, suggest an alternative way to estimate the value of reducing mortality risks from pollution. Do you believe that the value of a life saved or the value per statistical life year is a better way to measure the benefits of reduced mortality risk from environmental protection? Why?

Answer 1

• Yes the industrial risk/wage estimates are a reasonable metric for estimating the value of reduced mortality from environmental pollution but these are not the only one. We can also estimate the value of reduced mortality through the health services or precautions being provided or taken and through the environment protection to reduce pollution.
• Yes the value of a life saved or the value per statistical life year is a better way to measure the benefits of reduced mortality risk from environmental protection because it measures the improvement in our environment due to which the life expectancy of people has increased.

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