Value of Statistical Life of Children
Attributes
Medium: Health and/or Human Capital
Country: Philippines
Analytical Framework(s): Contingent Valuation
Unit(s): Mean WTP
Study Date: 2006
Publication Date: 2007
Major Result(s)
| Category | Resource/Environmental Good | PHP (2006) |
PHP (2014)1 |
USD (2014)2 |
|---|---|---|---|---|
| Parametric | Mean WTP for a 1-year efficacy dengue vaccine for children aged 14 years and below | 1,729.00 | 2,345.42 | 52.44 |
| Parametric | Mean WTP for a 10-year efficacy dengue vaccine for children aged 14 years and below | 2,047.00 | 2,776.80 | 62.09 |
| Parametric | WTP for mortality risk reduction | 699,000,000.00 | 948,207,480.00 | 21,200,553.60 |
| Parametric | Value of statistical life estimates for a child 14 years old or younger in Metro Manila | 39,900,000.00 | 54,125,148.00 | 1,210,160.36 |
| Non-parametric (lower-bound estimates) | Mean WTP for a 1-year efficacy dengue vaccine for children aged 14 years and below | 1,520.00 | 2,061.91 | 46.10 |
| Non-parametric (lower-bound estimates) | Mean WTP for a 10-year efficacy dengue vaccine for children aged 14 years and below | 1,852.00 | 2,512.28 | 56.17 |
| Non-parametric | WTP for mortality risk reduction | 652,000,000.00 | 884,451,040.00 | 19,775,051.42 |
| Non-parametric | Value of statistical life estimates for a child 14 years old or younger in Metro Manila | 35,200,000.00 | 47,749,504.00 | 1,067,610.14 |
About the Inflation Adjustment: Prices in Philippines (PHP) changed by 35.65% from 2006 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.36 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2025) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.
Study Note: This study's assessment is based on parents' willingness to pay for two hypothetical dengue vaccines for their children. It takes an innovative approach to the valuation challenge, one that removes much of the uncertainty surrounding similar past studies. This method involves isolating people's willingness to pay for the reduction in mortality risk that the vaccines bring. This is done by disentangling it from their willingness to pay for other related benefits that the vaccines bring (such as reducing the pain associated with illness).
Study Details
Summary: Based on parents' stated willingness to pay (WTP) for dengue vaccines for their children, this paper arrived at estimates of the value of statistical life (VSL) of children in Metro Manila. Unlike in previous VSL studies, respondents in this study were tasked (through a play-like activity) to isolate the value they attached to the specified mortality risk reduction from the stated WTP for the risk intervention scenario, i.e., a dengue vaccine. This was done to remove the influence of the risk context in the VSL estimate and hence improve the estimate's usefulness and applicability in a variety of environment-related project and policy assessments. The results of the two-stage estimation procedure consisting of a household vaccine demand model and a random effects probit model of the vaccine purchase decision for individual members conformed with economic intuition (household vaccine demand increased significantly increased with higher income while willingness to pay significantly increased with lower prices) and yielded value of statistical life estimates for children in Metro Manila in the range of US$0.70-0.80 million.
Site Characteristics: The survey was conducted in Metropolitan Manila (MM). MM, one of 17 regions in the Philippines, is the National Capital Region (NCR) and the political, economic, social and cultural center of the Philippines. It is one of the more modern metropolises in Southeast Asia and is among the world's 30 most populous. Covering an area of only 636 km2 (square kilometers), MM is the smallest of the 17 regions but it is the most populous (11.3 million in 2005, 13% of the entire Philippine population) and the most densely populated (17,751 per km2). MM consists of 14 cities and three municipalities. A sample of 100 respondents was taken from each of the five cities. The survey was conducted through in-person interviews from the months of February to May 2007.
Comments: The study succeeds in producing a result that can be used generally to value life in a range of scenarios and situations. As children are most vulnerable to environmental degradation such as air pollution and water pollution, this valuation will be particularly useful to environmental policy makers and campaigners looking to estimate the overall benefit of their work. This study also differs from existing VSL literature in that it elicited the WTP for a dengue vaccine for each and every member of the household and used the WTP decisions for all household members in the VSL calculation.