Robust Estimates of Value of a Statistical Life for Developing Economies: An Application to Pollution and Mortality in Santiago

The value-of-statistical-life (VSL) approach is used by environmental economists to value mortality changes resulting from environmental improvement, such as decreased urban air pollution. Because of scarce data, VSL estimates are not available for developing countries. Using robust regression techniques, we conduct a meta-analysis of VSL studies in industrialized countries to derive a VSL prediction function for developing economies accounting for differences in risk, income, human capital levels, and other demographic characteristics of these economies. We apply our estimated VSL to assess the willingness-to-pay for reduction in mortality linked to air pollution in Santiago, Chile. We find willingness-to-pay estimates in the range of $519,000 to $675,000 per life based on 1992 Purchasing Power Parity (PPP) U.S. dollars.