Valuing Mortality Risk Reductions and Health Improvements: A Life Expectancy Framework to Harmonize Policy Traditions

Many public policies directly affect an individual's mortality risk. The value of longevity gains has traditionally been monetized through three different concepts: value per statistical life (VSL), value per statistical life year (VSLY), and willingness-to-pay for a quality-adjusted life year (WTP-QALY). By adopting gains in life expectancy as the unifying metric and combining it with preference-based information on health and longevity, we set out an approach that would generate three measures that are conceptually linked at the individual level. In particular, explicitly integrating preferences over health impacts would allow for the WTP-QALY to be estimated alongside the VSL and VSLY. We argue that our approach has advantages over the direct and modeling methods developed in the literature to date. In addition, we clarify how using the proposed framework could deliver values allowing for consistent decision-making across policy domains and government departments in ex ante regulatory assessment while simultaneously honoring the different empirical estimation practices across government departments.