Abstract
There is a large and fast-growing literature on th economic value of changes in health risks. The theoretical foundations for willingness-to-pay (WTP) measures of risk changes have been explored and seem quite solid (see, for example, Jones-Lee. 1976: Rosen, 1988; Viscusi, 1992, 1993; Johansson, 1995). There are also quite a few empirical studies of the value of changes in health risks. In fact, several different methods, based on behaviour either in actual markets or in hypothetical or constructed markets, have been used to estimate the value of what is known as 'statistical life'.
This chapter is structured as follows. In the first section we introduce a simple model in order to provide definitions of the value of changes in health risks and other concepts which are used in later sections. We then go on to present the empirical methods which have been used to estimate the value of risk changes. Available empirical results are summarised, and we also provide a brief comparison of the value of a statistical life according to different methods and studies. The chapter ends with a few remarks on the evaluation of changes in groundwater quality.