26 A benefit of some proposals is the prevention of fatalities or injuries. The appropriate starting point for valuing these benefits is to measure the individual's WTP for a reduction in risk of death (or their willingness to accept a new hazard and the ensuing increased risk).
27 The willingness of an individual to pay for small changes in their own or their household's risk of loss of life or injury can be used to infer the value of a prevented fatality (VPF).The changes in the probabilities of premature death or of serious injury used in such WTP studies are generally very small.13
28 In the UK, the main measure of VPF incorporates the 'extra' value placed on relatives and friends, and any further value placed by society on avoiding the premature death of individuals. Accordingly, the addition of an individual's WTP for the safety of others to his 'own' WTP for 'own' safety may lead to double counting.14
29 A lower bound on the value of a prevented fatality may be determined by revealed preference and stated preference studies. This lower bound is useful for determining a threshold of value for money for safety expenditure and also for comparing proposals concerning increased safety.
30 Revealed preference studies can derive individual WTP for risk reduction from, for example, the size of wage differentials for more or less risky occupations; or price versus safety trade-offs in choosing transport modes; or WTP for safety devices such as smoke alarms or car air bags. However, in practice, these estimates of the revealed value of a prevented fatality are not precise. Stated preference approaches have also been used to provide estimates of VPF using questionnaires.15
31 In the UK, the Department for Transport (DfT) values the reduction of the risk of death in the context of road transport at about £1.145m per fatal casualty prevented (in 2000 prices).16 In addition to the WTP measures, these estimates include gross lost output, medical and ambulance costs. Values are uprated in line with assumed changes in GDP per head.
32 DfT also attributes monetary values to the prevention of non-fatal casualties, based on a WTP approach. Serious and slight casualties are valued separately and the values are uprated in line with changes in GDP per head. Values currently in use for preventing a serious and slight road injury are £128,650 and £9,920 respectively (at 2000 prices).17 Costs of police, insurance and property damage are added to these casualty values to obtain values for the prevention of road accidents. The HSE tariff of monetary values for pain, grief and suffering begins at £150 for the most minor non-reportable injury.18
33 There is evidence that individuals are not indifferent to the cause and circumstances of injury or fatality. For example, in their estimate of benefits from asbestos proposals, HSE currently doubles the VPF figure to allow for individual aversion to dying from cancer, and the additional associated personal and medical costs.19
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13 Franklin (2000), chapter 7, suggests that individuals systematically undervalue small risks, possibly introducing a downward bias in estimating VPF.
14 This augmentation of the 'own' WTP-based figure is legitimate only if concern for others' safety takes the form of 'safety-focused altruism' where despite being concerned for others' safety, people are indifferent to other determinants of their overall well-being. For cases that are intermediate, some augmentation of the 'own' WTP-based figure is justifiable. (M W Jones-Lee, (1992))
15 For additional information, refer to HSE (2000a), 'Valuation of Benefits of Health and Safety Control, Final Report', which describes an approach used to update the DfT value for reduction in risk of a fatality.
16 DfT See (Highways Economic Note No 1. 2000) 'Valuation of The Benefits of Prevention of Road Accidents And Casualties'. Available on the DfT website (http://www.dft.gov.uk).
17 ibid
18 See HSE website: http://www.hse.gov.uk
19 There is currently no evidence to support this adjustment. HSE has commissioned a study to investigate public preferences for preventing fatalities due to 'dreaded' risks to inform this issue.