Do the Benefits of COVID-19 Policies Exceed the Costs? Exploring Uncertainties in the Age-VSL Relationship

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dc.contributor.authorRobinson, Lisa A.
dc.contributor.authorSullivan, Ryan
dc.contributor.authorShogren, Jason F.
dc.contributor.corporateNaval Postgraduate School
dc.date2020
dc.date.accessioned2020-08-19T22:30:28Z
dc.date.available2020-08-19T22:30:28Z
dc.date.issued2020-06-14
dc.descriptionDRAFT June 14, 2020en_US
dc.descriptionFor the final version of this working paper, see: Robinson, L.A., R. Sullivan, J. Shogren, Do the Benefits of COVID-19 Policies Exceed the Costs? Exploring Uncertainties in the Age-VSL Relationship, Risk Analysis, Early View, 2020. https://doi.org/10.1111/risa.1356en_US
dc.description.abstractNumerous analyses of the benefits and costs of COVID-19 policies have been completed quickly as the crisis unfolds. The results frequently depend largely on the approach used to value mortality risk reductions, typically expressed as the value per statistical life (VSL). Many analyses rely on a population-average VSL estimate of $10 million; some adjust VSL for life expectancy at the age of death. We explore the implications of theory and empirical studies which suggest that the relationship between age and VSL is uncertain. We compare the effects of three approaches: (1) an invariant population-average VSL; (2) a constant value per statistical life-year (VSLY); and (3) a VSL that follows an inverse-U pattern, peaking in middle age. We find that when applied to the U.S. age distribution of COVID-19 deaths, these approaches result in average VSL estimates of $10.63 million, $4.47 million, and $8.31 million. We explore the extent to which applying these estimates alter the conclusions of frequently cited analyses of social distancing, finding that they significantly affect the findings. However, these studies do not address other characteristics of COVID-19 deaths that may increase or decrease the values. Examples include the health status and income level of those affected, the size of the risk change, and the extent to which the risk is dreaded, uncertain, involuntarily incurred, and outside of one’s control. The effects of these characteristics and their correlation with age are uncertain; it is unclear whether they amplify or diminish the effects of age on VSL.en_US
dc.format.extent13 p.
dc.identifier.citationRobinson, L.A., R. Sullivan, J. Shogren, Do the Benefits of COVID-19 Policies Exceed the Costs? Exploring Uncertainties in the Age-VSL Relationship, Risk Analysis, SSRN, 2020.
dc.identifier.urihttps://hdl.handle.net/10945/65369
dc.language.isoen_US
dc.publisherSSRNen_US
dc.rightsThis publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.en_US
dc.subject.authorValue per Statistical Lifeen_US
dc.subject.authorVSLen_US
dc.subject.authorCOVID-19en_US
dc.subject.authorPandemicen_US
dc.subject.authorWillingness to Payen_US
dc.subject.authorBenefit-Cost Analysisen_US
dc.titleDo the Benefits of COVID-19 Policies Exceed the Costs? Exploring Uncertainties in the Age-VSL Relationshipen_US
dc.typePreprinten_US
dspace.entity.typePublication
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