Advancing Economic Theory and Application of the Value of a Statistical Life (VSL)

Supervisors: Dr Patrick Fahr, Professor Stavros Petrou, Professor Rafael Perera

The Value of a Statistical Life (VSL) is a central concept in economic evaluation, used to monetise mortality risk reductions in areas ranging from health policy to environmental regulation. While widely applied, the theoretical foundations, transferability across contexts, and treatment of uncertainty remain active areas of debate. This DPhil project will critically examine the assumptions underpinning VSL estimation and explore how economic theory can better inform its use in public decision-making.

The project will focus on three interrelated areas: (1) the microeconomic foundations of individual preferences for risk and the link to marginal willingness to pay for mortality risk reductions; (2) the normative implications of using population-average VSL estimates in policy appraisal; and (3) the methodological and ethical challenges of transferring VSL estimates across countries, income levels (from high to low income settings), and risk contexts. The research will explore theoretical models, behavioural critiques, and policy implications of VSL use in diverse domains, including health and climate.

Depending on the student’s interest, the project may involve empirical work (e.g., meta-analysis of existing VSL estimates, stated preference data analysis) or the development of formal models (e.g., incorporating risk ambiguity, inequality aversion, or life-cycle considerations into VSL frameworks). The research will inform how mortality risk valuations can be used more consistently and ethically in economic evaluations across global settings.

Preferred applicant background/skills: The ideal candidate will have a strong foundation in economics, particularly microeconomic theory and welfare economics, with interest or experience in health economics, public economics, or environmental valuation. A Master’s degree in economics, health economics, or a related field is expected. Familiarity with stated preference methods, econometrics, or economic modelling is desirable. The candidate should be intellectually curious, comfortable with theoretical reasoning, and motivated to tackle foundational issues in applied welfare economics.