Altruistic preferences for life-saving public programs: do baseline risks matter?

Abstract

Cost-benefit analyses of life-saving public programs typically focus on the number of expected deaths avoided (statistical lives saved) as the metric for evaluating benefits. Although this measure of population risk is clearly important, it ignores the distribution of underlying individual risks. A similar number of lives can be saved by protecting relatively large populations with relatively low baseline risk as can be saved by protecting smaller populations faced with higher baseline risks. Should the value of saving a statistical life be sensitive to the baseline levels of risk to exposed individuals? This paper addresses this issue by focusing specifically on individuals' altruistic values with regard to life-saving programs. Using results from a survey, this study finds that when individuals are asked to state their preference for equally costly life-saving programs that will only affect others' level of risk, they prefer those that save more lives. More importantly, however, controlling for the number of lives saved, they also prefer programs that affect smaller populations facing higher levels of baseline risk. Furthermore, the results suggest that each order-of-magnitude increase in the level of baseline risk to others approximately doubles the altruistic value component of a statistical life saved.