• Steve H
    308
    Last month, with no fanfare, no press release, no ministerial statement, the transport agency Waka Kotahi published a document entitled Monetised benefits and costs manual v1.6 April 2023. The 429-page manual is a dense compendium of tables, formulae and, to the layperson, impenetrable economic justifications for obscure policies.

    But buried in this manual are two big changes to v1.5, published two years earlier. It raises the value we place on saving time stuck behind a wheel driving to and from work, from $7.80/hr to $19.53 an hour – an increase by a factor of 2½. That figure increases to as much as $36.18/hr if that's what it costs to avoid being stuck in congestion.

    And at the same time, it increased an esoteric number called the VoSL – the Value of a Statistical Life – from $4.88m to a somewhat breathtaking $12.5m. That's an even bigger increase.

    So what value does your company/organisation place on the life of an employee or member of the public caught up in an accident?
  • MattD2
    338
    And at the same time, it increased an esoteric number called the VoSL – the Value of a Statistical Life – from $4.88m to a somewhat breathtaking $12.5m. That's an even bigger increase.Steve H
    I can't find any other sources stating that they have increased their VoSL to $12.5M - and from the section in the report it is referring to the 2021 VoSL which was still $4.88M (Social cost of road crashes and injuries June 2021 update.
    Damage costs in Table 9 have been calculated based on the 2021 value of life years (VoLY) derived from the 2021 value of statistical life (VoSL) of $12,500,000 (NZ$)...NZTA's Monitised benefits and costs manual V1.6
    That sentence is a bit ambiguous and the $12.5M might actually be referring to the value of life years (VoLY) which (from my understanding) is more of a health based value, which makes sense as the section it is referrenced in is regarding the costs of damage due to emissions (i.e. it is factoring in both fatalities and decreases in health outcomes into the cost).
  • Steve H
    308
    3. Benefits > 3.1 Impact on social cost of deaths and serious injuries
    Valuation of social cost of crashes
    Unit values of crash costs are provided in Appendix 2: Crash analysis for each crash type by movement category, speed limit, severity and vehicle involvement.

    The values in the tables in Appendix 2 are based on Denne T (2023). The values per injury (as at July 2021) are:
    • $12.5 million per fatality
    • $660,100 per serious injury
    • $68,000 per minor injury.

    (pg 54)
  • Chris Peace
    84
    VOSL is an often used measure but we could also use, for example, QUALYS.
    VOSL is the "value of a statistical life" and has little to do with real lives. It's based on how much we are willing to spend to prevent some consequence. I usually use data published by the Ministry of Transport on its website which are actually the "social costs of road crashes" and so not the VOSL. The MoT data is nearly $5 million for a road fatality.
    The last time I checked that was about the same as the numbers used by the UK HSE and in Australia. That's what we should be willing to spend to avoid a workplace death. I use the $5 million as part of the "reasonable" test of "reasonably practicable" for workplace harm. It's a rough and ready measure that makes people sit up and think.
    A colleague, an economist, disagrees with my approach and prefers QUALYS. That's a way of measuring the lost quality of life due to some harm. It's more difficult to calculate.
    How much would you be willing to spend to avoid a workplace death?
    I must stop - meetings to go to! Maybe more later.
  • Andrew
    392

    @steve H. Min of transport is publishing dis/mis information.

    In NZ, as at 2023 the current official (ie Government)
    - Value of a Statistical Life (VoSL) is $5,184,615 per person. Up from $4,423,800
    - average length of life is 81.8 years
    - the QALY (Quality Adjusted Life Year) based on VoSL is $63,381 a year. This is based on a person in perfect health. If a person is Low Health Status then this knocks 50% of so would be $31,690

    There is also, from a safety perspective
    - Social Cost of Loss of a Human life = $5,783,615

    As far as Min of Transport is concerned they should be referencing
    - Social Cost of Fatal Road Accident = $6,847,071 per incident
    - Social Cost of a serious road crash = $693,579 per incident
    - Social cost of a minor road accident = $39,261 per incident

    So the issue Is the source. Do you prefer to use Denne T (I have no idea who that is or why Min Of Transport would choose an alternative source. Tin foil Hat time. Or do you prefer NZ govt source. I'll go for the latter - as it is the established numbers for statistical modeling.

    More fun health numbers
    Walking is worth $6 per person, push-biking is worth $3 and E-biking is worth $1. So if you are in a CBD you should really be ditching the E bikes and encouraging people to walk.

    And if you are Adult doing 300+ minutes moderate to vigorous physical activity per week then that's worth $2,870 per year

    Health care system cost of a fatal car crash $18,635. But a serious crash is $21,916

    An Intensive Care Unit is valued at $8,014 per day vs an emergency room at $503 per day
  • Andrew
    392
    Chris. I agree with your colleague.

    Your $5m is based on the total life expectancy of a person. I reckon you ought to be refining your approach to talk about a healthy 20 year old worker relative to an obese 65 year old worker.

    You could crudely use the QALY x remaining life expectancy for a more accurate figure.
  • Bruce Tollan
    32
    I like your numbers Andrew, Shall we suggest to the minister to amortise the social costs across all vehicles and apply this as a tax then give this as a subsidy to all us walkers. unintended consequences?
  • MattD2
    338
    You could crudely use the QALY x remaining life expectancy for a more accurate figure.Andrew
    H&S Professional: I recommend we spend $XYZ to reduce the risk of fatality or life altering injuries' to our workers because it is less than the calculated "QALY x remaining life expectancy" value of our workforce.
    Board: Fire everyone under the age of 60 and our new hiring policy is only hire workers that are older than 60 and with existing medical conditions...

    While that is absurdly extreme (and illegal from a workplace discrimination standpoint) it is one path that the discussion of the "value" of a life can take us, one that the continual measures of success of a company being based on growth and shareholder value maximisation will inevitably take us down (although we may essentially be there already).
  • Andrew
    392
    If people want to go down the path of valuing a human life they ought to at least try to do it accurately.

    And at work we already value humans - based on their skills and experience which is reflected in their rate of pay.

    So I guess where the risk of death is the same, we should invest more in our most highly paid employees and less on the least paid employees.

    Its like security - you will invest more in securing your most valuable assets and your least valuable will possible get zero security.

    Maybe we should look after people simply because it is the right thing to do.
  • MattD2
    338
    If people want to go down the path of valuing a human life they ought to at least try to do it accurately.Andrew
    But what is accurate in this endevour (and conversation) anyway - either source you choose from your figures is essentially just a thumb-suck, a somewhat arbitrary monitory value that (a sample of) society has placed on the cost it is willing to pay to prevent 1 additional death. Which is literally comparing the cost of saving lives with the opportunity cost of using that money for any other purposes.

    The real issue isn't that we a placing a specific value on a human life, rather it is that we live in a system that to function correctly has to place a specific value on a human life. As you mentioned in this system we should actually be directing more of the risk reduction to those that we value more in society (the workers that can command a higher wage because of their skills) - because those workers will create more growth and returns compared to the less valued workers (which is why they are valued more in the first place), which (as judged by the system) will create more benefits to society as a whole, e.g. rising standard of living, wealth creation, etc.
    [For clarity - these are my thoughts on the system, not my thoughts on how things should be].

    Maybe we should look after people simply because it is the right thing to do.Andrew
    I agree with this, but it will never really happen until we actually value all people equally irrespective of their skills or what benifits they can provide compared to others. If we continue to place a "market value" on each person, then there will always be justification to look after some people more than others. Whereas if we value that each person is contributing to society the best they can, it's hard to justify looking after one person more than another.
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