Original Article

Economic Value of Life in Iran: The Human Capital Approach

Abstract

Background: The human life value is among the most important challenges of the health economic evaluation. This limitation has reduced the feasibility of applying the cost-benefit method in evaluations of health interventions and policies. Using the human capital approach and discounted value of future earnings, the present study calculated the human capital of different age groups.

Methods: The required data were obtained using “income and expenditures of Iranian households” data in 2015 from the Statistical Center of Iran, which included the information on 19380 urban households.

Results: According to the calculation of human capital, the maximum value of a statistical life year in the high-income group was related to the age group of 30-34 yr old (223,286 US$ equals to 9378 million Iranian Rials). The lowest value in all three groups of high, medium and low income is related to the age group of 85 and older. In addition, the economic value of statistical life year for men has been calculated as higher than that of women, however, in older age groups, the human capital of both genders have been converging.

Conclusion: The economic value of life for young people aged between 20 to 30 yr was higher than other demographic groups. The findings of the research help to provide a more accurate base for the cost-benefit analysis of health and social policies. Considering the economic value of the statistical life for different age groups may change policy priorities in areas related to health and life of human beings.

1. Max W, Rice DP, Sung HY, Michel M (2004). Valu-ing Human Life: Estimating the Present Value of Lifetime Earnings, 2000. USCF: Center for To-bacco Control Research and Education. Available from: https://escholarship.org/uc/item/82d0550k
2. Viscusi WK, Masterman CJ (2017). Income elasticities and global values of a statistical life. J Benefit Cost Anal, 8(2): 226-50.
3. Smillie ٌ WG (1947). The Money Value of a Man. Am J Public Health Nations Health, 37(4): 469–470.
4. Viscusi WK (2008). How to value a life. Journal of Eco-nomics and Finance volume, 32(4): 311-23.
5. Petty W (1690). Political arithmetick, or a discourse concerning the extent and value of lands, people (and) buildings. 1st ed, Robert Clavel, London, pp.: 96-97.
6. Farr W (1876). Contribution to 39th Annual Report of the Registrar General of Births. Marriages, and Deaths for England and Wales. Available from: https://www.nationalarchives.gov.uk/help-with-your-research/research-guides/birth-marriage-death-england-and-wales/
7. Fein R (1959). Economics of mental illness. Am J Med Sci, 238(3): 394-395.
8. Selma J,Mushkin SJ, Collings FdA (1959). Economic costs of disease and injury: A review of concepts. Public Health Reports, 74(9): 795-809.
9. Rice DP (1967). Estimating the cost of illness. Am J Public Health Nations Health, 57(3): 424-40.
10. Weisbrod BA (1971). Costs and benefits of medical research: a case study of poliomyelitis. Journal of Po-litical Economy, 79 (3):527-544.
11. Landefeld JS, Seskin EP (1982). The economic value of life: linking theory to practice. Am J Public Health, 72(6): 555-566.
12. Blank LT, Tarquin AJ (2008). Basics of engineering economy. 1st ed. The McGraw-Hill Companies Inc, Boston, pp.: 80-85.
13. Mishan EJ, Quah E (2007). Cost-benefit analysis. Routledge, New York, pp.: 194-198.
14. Tichopad A, Zigmond J (2013). Value of Life: As Perceived by Physicians and the General Public. Value Health, 16(7): p. A477.
15. Acton JP (1973). Evaluating public programs to save lives: the case of heart attacks. RAND Corpora-tion, Santa Monica. Available from: https://www.rand.org/pubs/reports/R0950.html
16. Niroomand N, Jenkins GP (2017). Estimating the value of life and injury for pedestrians using a stat-ed preference framework. J Safety Res,62: 81-87.
17. Ainy E, Soori H, Ganjali M, et al (2016). Cost estima-tion of road traffic injuries among Iranian motor-cyclists using the willingness to pay method. Arch Trauma Res, 5(2):e23198.
18. Ainy E, Soori H, Ganjali M, Baghfalaki T (2017). De-riving Fatal and Non - Fatal Road Traffic Injury Cost by Willingness to Pay Method using Bayesi-an Analysis. Journal of Transportation Engineering, 8(3): 657-69.
19. Douglass JB, Kenney GM, Miller TR (1990). Which estimates of household production are best? Jour-nal of Forensic Economics, 4(1): 25-45.
20. Jorgenson DW, Pachon A (1983). The Accumula-tion of Human and Non-Human Capital.in: The Determinants of National Saving and Wealth. Eds, Mo-digliani et al. Palgrave Macmillan. London, pp: 302-350.
21. Jorgenson DW, Fraumeni BM (1992). The output of the education sector, in: Output measurement in the ser-vice sectors. Eds, Griliches. University of Chicago Press. Chicago, pp. 303-341.
22. O’Mahony M, Stevens P (2009). Output and productivity growth in the education sector: com-parisons for the US and UK. Journal of Productivity Analysis, 31(3): 177-194.
23. Wei H (2008). Measuring Human Capital Flows for Australia. Australian Bureau of Statistics Working Paper, No. 1351.0.55.023, Canberra.
24. Brent RJ (2004). Cost-benefit analysis and health care evalua-tions.1st ed. United Kindgom, pp.:273-275.
25. Abdoli G (2009). Estimating the Social Discount Rate for Iran. Journal of Economic Research, 9 (34):135-156.
26. Shirdel R, Sadeghi H, Assari-Arani A, et al (2017). Es-timation of Social Discount Rate in Iran with Us-ing Social Time Preference Approach. quarterly journal of Fiscal and Economic Policies, 5(18): 7-24.
27. Viscusi WK, Aldy JE (2003).The value of a statistical life: a critical review of market estimates through-out the world. Journal of Risk and Uncertainty, 27(1): 5-76.
28. Sayer L (2005). Gender, time and inequality: Trends in women's and men's paid work, unpaid work and free time. Social Forces, 84(1): 285-303.
29. Chapin CV (1913). The value of human life. Am J Public Health, 3(2):101-105.
30. Gouveia N, FletcherT (2000). Time series analysis of air pollution and mortality: effects by cause, age and socioeconomic status. J Epidemiol Community Health, 54(10): 750–755.
31. Lelieveld J, Haines A, Pozzer A (2018). Age-dependent health risk from ambient air pollution: a modelling and data analysis of childhood mor-tality in middle-income and low-income countries. The Lancet Planetary Health, 2(7):e292-e300.
32. Onieva-García MÁ, Martínez-Ruiz V, Lardelli-Claret P, et al (2016). Gender and age differences in components of traffic-related pedestrian death rates: exposure, risk of crash and fatality rate. Inj Epidemiol, 3(1):14.
33. Williams AF, Shabanova VI (2003). Responsibility of drivers, by age and gender, for motor-vehicle crash deaths. J Safety Res, 34(5): 527-31.
Files
IssueVol 50 No 2 (2021) QRcode
SectionOriginal Article(s)
DOI https://doi.org/10.18502/ijph.v50i2.5357
PMCIDPMC7956091
PMID33748003
Keywords
Economic value Statistical life year Human capital Cost-benefit analysis Economic evaluation

Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
How to Cite
1.
BASAKHA M, SOLEIMANVANDIAZAR N, TAVANGAR F, DANESHI S. Economic Value of Life in Iran: The Human Capital Approach. Iran J Public Health. 2021;50(2):384-390.