**Table 5.4 Reduced Deaths or YOLL Related to Ozone and PMl 0 Pollution Reduction Scenarios for the ZMVM in 2010'**

|||_Sce_<br>|_nario_<br>||
|---|---|---|---|---|
|_Endpoints_|_10%_|_20%_|_AQSI_|AQS2|
|_Mortality-acuteexposure_|||||
|**Totalpopulation-YOLLOzone**|**546**|**1,091**|**3,374**|**3,737**|
|_Modality-chronicexposure_|||||
|Totalpopulation-YOLLPM10|14,131|28,261|31,016|66,143|

a. 3% discount rate, average YOLL per death are 0.75 and five years for morality associated with acute and chronic exposures, respectively.

# **6. Economic Valuation of Scenarios**

Earlier studies suggested that improving air quality in Mexico City would bring limited benefits (Hernandez-Avila and others 1995). These studies, however, used a narrow definition of health benefits. Estimates of the effects of air pollution on human health were quantified for fewer endpoints than in section 5. In addition, health benefits were valued using a very narrow definition of benefits. Reductions in premature mortality were valued by the associated increase in eamings (the human capital approach). Reductions in illness were valued using the savings in medical costs and reductions in lost work time that result from reducing illness (the Cost of Illness approach). In the present study we use a broader definition of the value of health benefits: In addition to valuing avoided illness costs and productivity losses, we estimate the amount that people are willing to pay to avoid the discomfort associated with illness and the disutility associated with premature death. This section first discusses the methods used to value health benefits in this study. Next we present the main results of the health benefit analysis and the economic benefits of a reduction in the number of contingencies experienced."

## **Economic Valuation of Premature Mortality and Morbidity**

Economists value avoided premature mortality by the amount that people are willing to pay to reduce their risk of dying (Hernandez-Avila and others 1995). Ideally, "willingness to pay" (WTP) should capture the loss in satisfaction-from consumption, leisure time, interaction with friends and family-that occurs when life is shortened.'<sup>2</sup> It should, in particular, exceed the monetary value of the consumption (or income) lost when a person dies prematurely. In studies conducted in the United States (Viscusi 1993) estimates of WTP to reduce risk of death suggest that WTP is between 8 and 20 times as large as the corresponding gain in earnings from living longer. (The methods used to estimate WTP for reduced risk of death are discussed below.) Ideally, changes in premature mortality should be valued using WTP. The value of earnings lost when a person dies prematurely (the Human Capital measure of

> " A more detailed discussion of the methodology, the assumptions and the results is presented in Cesar and others (2000).

> 12 Typically, WTP to reduce risk of death is expressed in terms of the Value of Statistical Life (VSL). If each of 10,000 people are willing to pay $100 to reduce their risk of dying by I in 10,000, they are together WTP $1,000,000 for risk reductions that sum to one statistical life. The $1,000,000 is termed the Value of a Statistical Life.

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