Benefit-Cost Analysis: Valuing Life and Health

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This course allows those that have been using benefit-cost analysis for some time to get a refresher on not just the how, but the why, of what we do, to keep improving the quality of our work. It also allows new economists or analysts (or those coming from other specialties) to quickly familiarize themselves with the material and concepts.
  • —Katarzyna Patora
  • Lead Economist, Washington State Department of Ecology

Online Program Overview

Promoting Evidence-Based Environmental, Health, and Safety Policies

Benefit-cost analysis is a well-established and widely used approach for systematically assessing the impacts of environmental, health, and safety policies and informing decisions. It is a required component of the policy development process followed by many government agencies and organizations around the world.

During the COVID-19 epidemic, benefit-cost analysis has received unprecedented attention. It has played an important role in highlighting key trade-offs and informing decisions at a time when resources are very constrained and many other problems need to be addressed. However, this attention has highlighted confusion about the overall analytic framework and its advantages and limitations. The approaches used to value mortality risk reductions, commonly referred to as the value per statistical life (VSL), are also widely misinterpreted. Understanding the appropriate use of benefit-cost analysis and its implications is essential to promote evidence-based decisions in the face of numerous crucial policy challenges.

In this online program, Lisa A. Robinson, a leading Harvard expert on benefit-cost analysis, will aid you in understanding the analytic framework and its application globally. You will learn about methods for valuing changes in health and longevity and the estimates recommended for use in high-, middle-, and low-income settings. She will be accompanied by experts who will illustrate the application of these methods in several policy areas. Through interactive presentations, case studies, extensive discussion, and optional office hours, you will develop a deeper understanding of these approaches and their application.

You will leave this program understanding the advantages and limitations of benefit-cost analysis, as well as improving your ability to evaluate, interpret, and use the results.

Understanding Policy Trade-Offs: Are the Benefits Worth the Costs?

Benefit-cost analysis estimates the positive and negative impacts of a policy, clarifying the trade-offs implicit in the policy decision. As illustrated by the COVID-19 pandemic, the core challenge involves assessing the extent to which saving lives should take precedence over incurring economic damages and other costs.

Benefit-cost analysis, which is also known as cost-benefit analysis or return on investment analysis, is used in many other contexts to evaluate environmental, health, and safety policies. For example, it plays a major role in developing air pollution policies, motor vehicle safety regulations, smoking restrictions, and food safety requirements. In each case, benefit-cost analysis addresses the central question: are the benefits provided worth the costs incurred?

Learning Objectives

  • Understand the fundamental concepts that underlie benefit-cost analysis and its advantages and limitations
  • Identify the major components of a benefit-cost analysis and what each should include
  • Increase familiarity with methods for valuing health and longevity, including revealed- and stated-preference studies and their application
  • Learn about sources of guidance, including default values

Curriculum

Major topics to be covered in the course will include:

  • Benefit-Cost Analysis Framework
    • Conceptual foundation
    • Individual preferences and willingness to pay
    • Aggregate social welfare and distributional equity
    • Implementation components and steps
  • Valuing Longevity
    • Value per statistical life (VSL) concept
    • Market and nonmarket valuation methods
      • Human capital
      • Revealed and stated preferences
      • Benefits transfer
    • Guidance and recommended values
  • Valuing Health
    • Value per statistical case (VSC) concept
    • Available valuation studies
    • Proxy methods
      • Averted costs (direct and indirect cost of illness)
      • Monetized quality-adjusted life years (QALYs) and disability-adjusted life years (DALYs)

Credits and Logistics

Continuing Education Credit

All participants will receive a Certificate of Participation upon completion of the program.

Who Should Participate

This course is designed for practitioners, scholars, policymakers, and other stakeholders who have some familiarity with methods for economic evaluation and want to increase their understanding of benefit-cost analysis and its application to environmental, health, and safety policies globally.

Examples of participants include:

  • Economists who conduct benefit-cost analyses
  • Managers who commission and review benefit-cost analyses
  • Researchers who contribute inputs to these analyses, such as estimates of deaths averted or technology effectiveness
  • Stakeholders who participate in the policymaking process, such as interest group representatives and congressional staff

This program addresses policies to be implemented in high-, middle-, and low-income countries that are likely to lead to health improvements, making it valuable for participants across the globe. Potential participants will come from a range of employers, including government agencies, intergovernmental organizations, foundations, universities, non-profits, and other organizations.