The views presented in On Balance are those of the authors and do not represent the views of the Society, its Board, or its members. 

The idea that decisions should be based on careful evaluation of the positive and negative impacts of alternative policies has enormous appeal, as demonstrated by the extensive use of benefit-cost analysis around the world. However, as conventionally implemented, benefit-cost analysis is based on strong normative assumptions. To measure individual wellbeing, it relies on individuals’ willingness to exchange their own income for the outcomes they themselves experience. To measure societal welfare, it relies on simple aggregation of these values across individuals. Although many alternatives have been proposed, they are not as well-developed nor widely used, and their normative dimensions have not necessarily been thoroughly explored.

To address these concerns, the Brocher Foundation hosted a 2022 Summer Academy, “Healthy, Wealthy, and Wise - The Ethics of Health Valuation,” selected by the Foundation’s Scientific Committee and organized by Lisa Robinson, Nir Eyal, Samia Hurst, and Daniel Wikler. As indicated in the program (which includes links to related readings), participants explored multiple dimensions of several alternatives to the conventional approach. Examples include measures of subjective well-being (“happiness”), equivalent income, and healthy life years, as well as social welfare functions. Variants include those that assign extra weight to benefiting the very young, or the poor, the unhealthy, or the otherwise disadvantaged.

Attendees included distinguished scholars, early career researchers, and practitioners from the fields of philosophy, public health, economics, and biomedical sciences, who were then invited to contribute to a peer-reviewed “Ethics and Benefit-Cost Analysis” special issue of the Journal of Benefit-Cost Analysis. The Brocher Foundation was the principal financial supporter of the special issue; supplemental funding was provided by the Rutgers University Center for Population-Level Bioethics, the University of Geneva Institute for Ethics, History, and the Humanities, and the University of Bergen Centre for Ethics and Priority Setting.

As described in the “Introduction,” the nine articles in the special issue explore alternative conceptual frameworks for estimating and comparing costs and benefits, and their application from ethical and practical perspectives. In the first article, “The Right Numeraire or the Just Weights? How to Make BCA Rational and Fair,” Marc Fleurbaey and James K. Hammitt explore conceptual issues related to measuring individual and societal welfare. Much attention has been paid to the relative merits of alternative measures of individual welfare (i.e., the numeraire). The authors argue however that simply summing these measures across the affected population is problematic; it is important to utilize approaches that give greater weight to policies that benefit the worse off.

Three articles then describe the use of social welfare analysis as an alternative to conventional benefit-cost analysis and illustrate its implementation. In “Social Welfare Functions and Health Policy: A New Approach,” Matthew Adler provides an overview of the framework and discusses its application. In “The Global Burden of the COVID-19 Pandemic: Comparing Benefit-Cost Analysis and Social Welfare Analysis,” Maddalena Ferranna illustrates the application of conventional benefit-cost analysis and social welfare analysis to pandemic preparedness policies globally, considering both utilitarian and prioritarian social welfare functions. In “From Benefit-Cost Analysis to Social Welfare: A Pragmatic Approach,” Maddalena Ferranna, James K. Hammitt, and Lisa A. Robinson develop an approach for conducting social welfare analysis that relies on weights rather than more complex modeling.

The two articles focus on valuing mortality risk reductions. In “The Value of Life in the Social Cost of Carbon: A Critique and a Proposal,”John Broome criticizes how these values have been calculated in estimating the impacts of climate change and other policies from a philosophical perspective. In “Lessons from Applying Value of Statistical Life and Alternate Methods to Benefit-Cost Analysis to Inform Development Spending,” Alice Redfern, Sindy Li, Martin Gould, Felipe Acero, and Daniel Stein discuss the results of surveying low-income individuals in Ghana and Kenya about their preferences for spending to reduce mortality risks, including risks experienced at different ages.

Different conceptual frameworks are explored in the remaining three articles. In “The Health-Augmented Lifecycle Model,” JP Sevilla augments the standard lifecycle model to incorporate the value of mortality and morbidity risks, based on individual preferences. An alternative approach to estimating values is explored in “Citizen Preferences and BCA: A Model of Willingness-to-Pay Behind a Veil of Ignorance,” by Morgan Beeson, Susan Chilton, Hugh Metcalf, and Jytte Seested Nielsen. The authors develop a conceptual approach for estimating citizen values that incorporate a veil of ignorance under which individuals do not know how they themselves will be affected by a policy. Finally, in“Monetizing Animal Welfare Impacts for Benefit-Cost Analysis,” Mark Budolfson, Romain Espinosa, Bob Fischer, and Nicolas Treich go beyond the usual focus on human wellbeing and consider the value of animal welfare. They discuss recent work which provides a foundation for estimating the wellbeing potential of different species on a single scale.

The articles in this special issue highlight important advances. They lay the foundation for future research, while at the same time emphasizing the importance of economic evaluation more generally to promote understanding of the trade-offs implicit in any policy choice.

Lisa A. Robinson is a Senior Research Scientist, Deputy Director of the Center for Health Decision Science, and core faculty member of the Center for Climate, Health, and the Global Environment at the Harvard T.H. Chan School of Public Health, where she is also affiliated with the Center for Risk Analysis and Department of Environmental Health. She is a Fellow of the Society for Benefit-Cost Analysis and served as its President in 2014, and is a member of the Journal of Benefit-Cost Analysis Editorial Board.