Resource Allocation in Public Sector Programmes: Does the Value of a Life Differ Between Governmental Departments?

Cubi-Molla, P., Mott, D., Henderson, N., Zamora, B., Grobler, M. & Garau, M. 

Research Paper
February 2021

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OHE explores the values of life that are used in analyses by the governmental departments of health, social care, environment, and transport, for a range of countries: Australia, Canada, Japan, New Zealand, South Korea, the Netherlands, and the UK. In most of the countries explored in this report, there is evidence that the criteria for resource allocation used by government or its agencies in the health sector values life significantly lower than the other non-health departments. The authors present a theoretical model which suggests that the existence of different values of life across departments is not inconsistent with the idea of optimal resource allocation (in a static model) but only if perfectly counterbalanced by non-health attributes. Notably, some form of reconciliation is needed to correct the potential imbalance in the value of the same attribute (life) across public sectors. Reconciliation could range from reallocation of budgets, transfers of benefit, to adjustments of benchmarking thresholds.

Our results were based on a literature review, conducted to identify evidence from technical reports, guidelines, and tools published directly by government departments indicating methods for conducting impact assessments or appraisals. Estimates of value of life identified in the literature review were converted to one common metric (the value of a quality adjusted life year) to enable comparison. The value of life in transport/environment departments is presented as a proportion of the value of life in health departments in each country using the most realistic/commonly applied estimates. These proportions were then compared between countries to assess overall trends.