Valuing Prevention of Death and Loss of Life Quality: Policy Implications of Using Value of Statistical Life and Quality Adjusted Life Year Estimates

Many areas of public policy deal with non-market benefits that are difficult to value, yet the accountability for public expenditure demands efficiency; this involves comparing the value of outcomes with costs. Different techniques have evolved to address the challenge. This paper discusses a specific example that is important in a range of policy areas: the values placed on saving life and improving life quality. This appears in analyses of public investments, or policy impacting on health and safety. We discuss alternative approaches to this valuation, i.e. the value of statistical life (VOSL), the value of life years lost (or saved) and the value of quality adjusted life years (QALYs).