Valuing Reduced Risks to Children: The Case of Bicycle Safety Helmets

Abstract

The protection of children's health has recently become a mandated priority for federal policy makers. To assess many of the regulations that affect children's health, policy makers need estimates of the monetary value of reducing mortality risks to children. Although the economics literature has provided many estimates of the value of statistical life (VSL) for adult populations, it has provided none for school age children. This article studies the market for bicycle safety helmets and estimates for the first time a separate but comparable VSL for children and adults. We derive three estimates of VSL for each of three age categories (5 to 9, 10 to 14, and 20 to 59) that range from $1.1 to $4.0 million. In all cases, estimates for adults are highest, followed by estimates for the youngest children. (JEL J13, J17) * This is a revised version of a paper presented at

Altruism, fertility, and the value of children: Health policy evaluation and intergenerational welfare

“…The new expression states that increases in life expectancy will be more valuable in high fertility societies. Alternatively, (5) imply that willingness to pay for changes in adult mortality risk depend on parenthood status and the number of children in the household (see Cameron, DeShazo, andJohnson, 2007, andJenkins, Owens, andWiggins, 2001, for empirical estimates of the role of fertility in adult willingness to pay). As in the case of the consumption factor, increases in life expectancy are more valuable for low values of the elasticity of the fertility sub-utility in relation to its argument.…”

“…As indicated in Scapecchi (2006, 14) the value of children's health benefits is often higher than those of adults although this is not always the case. In terms of the "value of a statistical life," or valuations for reductions in child mortality risk, studies are often based on the purchase or use of safety-related goods (see Blomquist, Miller, and Levy, 1996, Carlin and Sandy, 1991, and Jenkins, Owens, and Wiggins, 2001). We will consider in detail current estimates of the "value of a statistical life" in our quantitative section.…”

“…Several of these applications have stressed that the evaluation of policies affecting children requires knowledge of parental preferences, since children are not the actual decision-makers in most legal and economic contexts (see, for example, Scapecchi, 2006, Carlin and Sandy, 1991, Mount et al, 2000, Dickie and Ulery, 2001, and Jenkins, Owens, and Wiggins, 2001. Endogenous fertility decisions have also been suggested as a way to deal with evaluations of welfare involving future generations, since exogenous fertility implies a series of puzzling considerations.…”

“…Finally, Jenkins, Owens, and Wiggins (2001) make use of data from purchases of bicycle helmets, which are available specifically for people at different age ranges and protect one particular individual within the family. From the estimates presented by the authors, our preferred value is the one that assumes that helmets are worn less than 100% of the time and that only half of the benefit comes from mortality reductions (the rest being attributed to morbidity).…”

“…This specification leads to "values of a statistical life" of $1.3 million for children and $2 million for adults. Blomquist, Miller, and Levy (1996), Mount et al (2000), and Jenkins, Owens, and Wiggins (2001) estimate the "values of a statistical life" for children and adults separately, based on costs and safety features associated with the use of seat belts, child safety seats, automobiles, and helmets. These reflect values implicit in decisions taken by adults, matching well our theoretical formalization.…”