Economic valuation of air pollution mortality: A 9-country contingent valuation survey of value of a life year (VOLY)

Abstract

This paper provides a key element for the calculation of the damage costs of air pollution, namely the valuation of mortality, important because premature mortality makes by far the largest contribution. Whereas several studies have tried to quantify the cost of air pollution mortality by multiplying a number of deaths by the ‘value of prevented fatality’ (also known as ‘value of statistical life’), we explain why such an approach is not correct and why one needs to evaluate the change in life expectancy due to air pollution. Therefore, an estimate for the monetary value of a life year (VOLY) is needed. The most appropriate method for determining VOLY is contingent valuation (CV). To determine VOLY for the EU, we have conducted a CV survey in 9 European countries: France, Spain, UK, Denmark, Germany, Switzerland, Czech Republic, Hungary, and Poland with a total sample size of 1463 persons. Based on the results from this 9-country CV survey we recommend a VOLY estimate of 40,000 € for cost–benefit analysis of air pollution policies for the European Union. As for confidence intervals, we argue that VOLY is at least 25,000 € and at the most 100,000 €.