The Marginal Willingness to Pay for Longevity: A Better Way to Value Changes in Mortality Hazard

One of the most contentious issues concerning benefit–cost analyses of environmental and other regulatory programs has been the valuation of reductions in mortality risks. The conceptual basis for most valuation exercises has been the value of a statistical life (VSL). However, despite decades of both theoretical and empirical research on the meaning and measurement of the VSL concept, there is no consensus concerning the validity of the results it produces in actual applications. In this paper, we review the development and application of the VSL approach and then propose what we believe to be a better way to value changes in mortality hazard.