# I. Introduction

Since 1960 disasters have killed approximately 5 million people worldwide, and injured millions more. Droughts alone have killed over 2.5 million people, earthquakes over 1 million and storms and cyclones over 750,000. The majority of deaths have occurred in developing countries. Indeed, it is well known (Kahn 2005; Buys et al. 2007) that, although the number of disasters per capita shows little correlation with per capita income, disaster deaths per capita increase as per capita income decreases.

Although the absolute number of people killed in disasters is small relative to total deaths, many disaster-related deaths are preventable. The relevant question for policy is whether the benefits of preventing disaster-related death and injury exceed the costs. Key methods of reducing death and injury in the event of a disaster include the strengthening of buildings to withstand earthquakes and early warning systems to allow evacuation in the event of storms and floods. These measures have been extremely successful in reducing the public health impacts of disasters in the US and other high income countries: deaths from storms in the US have decreased dramatically over the past 50 years (Malilay, 1997a). DFID (2005), in comparing the period 1900-1949 with 1950-1992, reports that the average number of persons killed in an earthquake has fallen from 12,000 to 2,000 in high income countries, but has remained constant—at 12,000 deaths—in developing countries. The question is whether the measures that have proven effective in reducing deaths in high-income countries pass the benefit-cost test in developing countries.

Benefit-cost analyses of measures to reduce losses stemming from damages and losses to financial assets in the event of a disaster are common in developed countries (Rose et al., 2007) and are becoming increasingly common in developing countries (Provention Consortium, 2008). With rare exceptions, however, these studies do not count reduced death and injury among the monetized benefits of ex ante measures to reduce losses in the event of a disaster.<sup>4</sup> The purpose of this paper is to review the literature on health valuation and suggest practical approaches to valuing avoided death and injury that can be applied in benefit-cost analyses of disaster risk reduction projects. Specifically, we suggest methods of estimating the value of mortality risk reductions (i.e., of the Value of a Statistical Life or VSL) and the value of avoided injuries associated with disasters for a wide range of countries.

The paper begins with statistics on the deaths and injuries associated with various types of disasters. Section III presents the framework of a probabilistic benefit-cost analysis of an _ex ante_ measure to reduce disaster risk—the framework in which the monetized value of avoided death and injury will be incorporated—and provides examples where incorporating lives saved has made a significant difference in the outcome of the analysis.

Sections IV and V discuss methods of valuing avoided death and injury. Section IV presents a conceptual framework for valuing risk of death and briefly reviews the

> 4 Exceptions include studies of building strengthening by A. Smyth et al. (2004a, 2004b) and Ghesquiere et al.’s (2006) study of loss reduction measures in Bogota.

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