Measuring the Value of Mortality Risk Reductions in Turkey

Abstract

The willingness to pay (WTP) for mortality risk reduction from four causes (lung cancer, other type of cancer, respiratory disease, traffic accident) are estimated using random parameter logit model with data from choice experiment for three regions in Turkey. The value of statistical life (VSL) estimated for Afsin-Elbistan, Kutahya-Tavsanli, Ankara and the pooled case are found as 0.56, 0.35, 0.46 and 0.49 million Purchasing Power Parity (PPP) adjusted 2012 US dollars (USD). Different types of risk cause different VSL estimates and we found the lung cancer premium of 213% against traffic accident. The effects of one-year-delayed provision of risk-reduction service are the reduction of WTP by 482 TL ($318 in PPP adjusted USD) per person on average, and the disutility from status-quo (zero risk reduction) against alternative is found to be 891 TL ($589 in PPP adjusted USD) per person on average. Senior discounts of VSL are partially determined by status-quo preference and the amount of discount decreases once the status-quo bias is removed. The peak VSL is found to be for the age group 30–39 and the average VSL for the age group is 0.8 million PPP adjusted USD). Turkey’s compliance to European Union (EU) air quality standard will cause welfare gains of total 373 million PPP adjusted USD for our study areas in terms of reduced number of premature mortality.