This report, the final output of the Valuation of Environment-Related Health Impacts (VERHI) project, presents new findings on whether the value of reducing environmental risk greater for children than for adults.

This OECD book proposes an in depth analysis of the main methodological difficulties associated with estimating the social value of a reduction in environmental health risks to children.

The relationship between environment and children’s health has been the subject of increasing interest these last ten years. For instance, many OECD Member countries are reporting asthma epidemics exacerbated by air pollution: in the United States nearly 1 in 13 school-age children (approximately 4.8 million) has asthma, and the rate is increasing more rapidly in school-age children than in any other group. The importance of this issue has resulted in a growing number of epidemiological studies aiming at better understanding and better characterising the relationship between environmental pollution and the health of children. However, in many respects, the valuation of children’s health strongly differs from the valuation of adults’ health and constitutes a real challenge for analysts as well as for decision-makers. Consequently, this book proposes an in depth analysis of the main methodological difficulties associated with estimating the social value of a reduction in risk to children. Questions such as how to elicit children’s preferences, what valuation methodology and benefit measure to choose, how to discount benefits to children’s health, and how to account for economic uncertainties in this specific context of economic valuation will be systematically examined in order to define key policy implications and to pave the way for further research.

This report, the final output of the Valuation of Environment-Related Health Impacts (VERHI) project, presents new findings on whether the value of reducing environmental risk greater for children than for adults.

This article reviews the economics literature dealing with valuation of reduced environmental risks to children's health. We describe conceptual models together with results from a number of empirical studies. The conceptual models analyze valuation issues from the perspective of parents; treat health risk as endogenously determined; and demonstrate that in equilibrium, marginal willingness to pay to reduce risk for the child relative to marginal willingness to pay to reduce risk for the parent should equal the ratio of marginal risk reduction costs. Empirical studies treat both mortality and morbidity associated with exposure to environmental health risks. These studies generally find that parents are willing to pay more for absolute risk reductions for their children than they are willing to pay for corresponding risk reductions for themselves. Possible reasons for this outcome along with suggestions for further research are discussed.

Conclusions, and recommendations -- Introduction and background -- Unique biological characteristics of children -- Developmental stage-specific susceptibilities and outcomes in children -- Exposure assessment of children -- Methodologies to assess health outcomes in children -- Implications and strategies for risk assessment for children.

Appropriate characterization and valuation of the health risks specific to children is important for effective environmental health risk management. This paper highlights the typical information provided by risk analysts about risks to children and the information needs of economic analysts. Particular emphasis is given to transparency in risk characterization (Browner, 1995) and the required assumptions to bridge the data and knowledge gaps. This paper also provides strategies intended to promote discussion and cooperation between risk and economic analysts, including a list of questions to ensure that key issues are discussed in advance of and during the risk assessment process. Finally, the paper provides an example of coordinated risk and economic analyses that characterized and valued risks and benefits for children.

This paper describes alternative empirical techniques of economic analysis to assess the monetary value of human health, and outlines the issues that arise when these techniques are transported to value environmental hazard interventions intended to improve the health of young children. It examines four economic valuation techniques currently used to assess changes in human health (i.e., cost of illness method, hedonic method, averting behavior method, and contingent valuation method) and critiques the applicability of these techniques for assessing the value of children's health changes.