Valuation of Children's Health Effects

Opening Date: February 7, 2000
Closing Date: June 6, 2000

1.0     Introduction
2.0     Children's Health Valuation
2.1     Overview
2.2     Description
2.2.1. Parental and societal values of children's health effects
2.2.2.    Benefit Transfer: Using values from adult-oriented studies to evaluate children's health effects
2.3        Relationship to Current EPA Activities
3.0     Funding
4.0     Eligibility
5.0     Instructions for Application Submission
5.1     Sorting Code
5.2     Additional Requirements: Data Development
6.0     Contacts

1.0 Introduction

The Environmental Protection Agency (EPA) Office of Research and Development, National Center for Environmental Research (NCER), in cooperation with the EPA Office of Children's Health Protection (OCHP) announces a new extramural grants competition supporting research leading to improved valuation of children's health effects.

EPA has supported similar socio-economic research in prior years through the EPA/NSF joint program on Decision-making and Valuation for Environmental Policy. Also, this year EPA has issued a solicitation addressing market mechanisms and incentives for environmental policy, and, subject to available funding, the Agency plans a socio-economic solicitation addressing the determinants of environmental behavior and the influence on environmental performance of governmental interventions such as enforcement and compliance assistance. Additionally, EPA is issuing solicitations for research to characterize the effects of various environmental factors on children's health. Information on announcements and awards made in these competitions may be found on the Internet at.

2.0 Children's Health Valuation

2.1 Overview

In April 1997 President Clinton signed Executive Order 13045, "Protection of Children from Environmental Health Risks and Safety Risks," to ensure that federal health and safety regulations recognize and explicitly account for risks to children. Because decisions on health protection often require benefit-cost analysis, or related economic assessments, EPA is interested in sponsoring economic valuation research that will enhance the ability of all public and private stakeholders to evaluate policies and actions which may protect children from environmental health threats.

Existing analyses generally have not evaluated children separately from adults because there rarely has been a scientific basis for identifying distinct or more pronounced health effects for children. To compound the analytical difficulty, economic valuation studies have focused on individual adults' willingness to pay to reduce risks to themselves, not children. However, recent research has shown that children differ from adults in both the kind and the severity of environmentally-induced adverse health effects. While valuing reductions in adverse children's health effects is increasingly critical for selecting appropriate risk-reducing policies and actions, information is extremely limited about both the adverse effects of environmental risks to children, and the value of reducing these risks. This solicitation focuses on improved understanding of the latter issue, valuation of reducing health risks to children.

The competition encourages proposals from researchers from all behavioral, social, and economic sciences. It encourages collaborations with non-social science disciplines when needed to answer important social science questions. It will support both research conducted within a single disciplinary tradition, and encourages as novel, collaborative, and interdisciplinary scientific efforts.

2.2 Description

To promote economic valuation research that would provide new knowledge on how to enhance valuation of children's health effects, EPA requests applications for research funding in two areas: (1) parental and societal willingness to pay (WTP) for reductions in risks to children's health, and (2) improved transfer of benefits from existing adult-oriented analyses to children. All proposals should clearly identify the environmental stressors and resulting health effects that will be investigated, as well as the attributes of children (as children and as future adults) that are altered by those effects. Examples of such attributes include intelligence, fertility, mobility, and life expectancy.

2.2.1. Parental and societal values of children's health effects

The existing economic valuation literature is based primarily on the concept of individual consumer willingness to pay for marginal changes in circumstances that affect each person's own well-being. Economic analyses customarily assume fully informed and rational consumer behavior when making choices involving risk tradeoffs. Children, particularly young children, often lack the experience and resources - including information, judgment, and income - to indicate a meaningful willingness to pay. The resources and preferences of some other party must therefore provide the basis for estimating benefits. Therefore, analysis of policies affecting children's health typically cannot rely on individual willingness to pay as a measure of benefits.

Consequently, this solicitation seeks research to estimate both parental and societal WTP to reduce environmental health risks to children and to discern whether parental values are reasonable proxies for total social value. Generally, parents are best situated to know and to care about their children's health and well being, and are accustomed to facing economic tradeoffs with respect to their children. As a result, parental willingness to pay provides a natural starting point for benefit estimation.

Parental WTP, however, may differ from social WTP for several reasons. First, as adults, children will provide benefits to, or impose costs on society, which are not reflected in parents' willingness to pay. Second, altruism - caring about others' children - may cause total parental WTP to differ from total social WTP. Third, individual parents face resource constraints and distortions that society as a whole does not. Inadequate health risk information, income constraints, and inequitable access to health care and insurance may cause parents to make socially inefficient investments in children's health. The size and direction of any divergence between parental and social willingness to pay are empirical questions on which little evidence presently exists.

Proposals should clearly identify where outcomes are specific to certain health endpoints, and the robustness of results with respect to different health endpoints. Therefore, research proposals should address the objectives below:

1.    Description and examples of how valuation of children's health differs from adult health valuation and development of methods to measure the value of reducing risks to children's health using both established and novel techniques of non-market valuation.

2.     Identification and explanation of divergences between private and social willingness to pay for children's health protection. Determination of the circumstances under which total parental willingness to pay is a suitable proxy for societal willingness to pay.

3.    Explanation of the role of household income, family composition, parental education, access to insurance and health care, and other factors affecting parents' willingness to pay to protect the current and future health of their children.

4.    Development of credible means to both segregate and aggregate the values of child and adult health benefits in policies that may reduce risks to the health of both children and adults.

Applicants are encouraged to submit proposals that achieve several of these objectives and involve experts from economics and other disciplines.

Examples of related research questions:

  • What are the roles of dependency, ongoing development, and unknown future potential of children in affecting how valuation is derived?

  • What is the role of family structure (e.g., presence or absence of, or number of children in household) on the valuation of children's health?

  • How do values for reducing fatal risks differ between children and adults? What factors must be taken into consideration to account for the age, dependency and developmental status of children?

  • What is the value of lost school days, reduced intelligence, or other measures of child morbidity values?

  • How does uncertainty regarding the underlying dose-response data affect the framework of the valuation problem?

  • To what degree does community support for health programs for children reveal social willingness to pay?

  • Under what conditions is parental willingness to pay more likely to understate or overstate social benefits?

  • Under what conditions (e.g., age, grade-level) are children considered mature enough to make their own decisions and value determinations regarding health risks?

  • How do subjective (ex ante) perceptions of children's health risks differ from perceptions about (ex ante) adult health risks? How do objective information or experience with children's health risks (ex post) affect these perceptions? What are the implications for "correctly" evaluating children's health?
  • 2.2.2 Benefit Transfer: Using values from adult-oriented studies to evaluate children's health effects

    The lack of child-specific health studies, which the above research objectives seek to address, creates a strong case for using information from existing adult health valuation studies to estimate the value of children's health. EPA seeks research that would describe the adjustments required to existing studies to make them theoretically sound estimates of children's health values.

    Of particular concern is applying to children existing values of reductions in premature mortality in adults. Reduced mortality typically is monetized using the value of a statistical life (VSL). The VSL is based on estimates of the willingness to pay for small reductions in the risk of death (or on the willingness to accept compensation for small increases in the risk of death). Estimates of the VSL are based primarily on studies that examine the higher compensation that workers accept for taking jobs with higher risks of death. There are no children in the samples of adults used to estimate the VSL, while available evidence indicates that the VSL varies among adults of different ages. Additionally, the voluntary decision of an adult to accept a workplace risk in exchange for higher earnings seems far removed from the situation of a child who faces an increased risk of death from an environmental hazard. Moreover, a child loses more expected years of life than does an adult when death comes prematurely.

    Again, proposals should clearly identify where outcomes are specific to certain health endpoints, and the robustness of results with respect to different health endpoints. EPA seeks research proposals that address the objectives below:

    1.     Development of reliable and theoretically sound methods to adjust adult willingness to pay studies to avoid morbidity effects to apply to children's health effects.

    2.     Development of reliable and theoretically sound methods to adjust estimates of the value of statistical lives to apply to children, including elucidation of the difficulties of transferring existing VSL estimates to children.

    Applicants are encouraged to submit proposals that achieve these objectives and involve experts from economics and other disciplines.

    The results of this research are expected to inform federal and state policy-makers in both executive and legislative capacities, as well as members of regulated communities, the academic community, and public interest groups, all of whom will be stakeholders and participants in the debate on uses of children's health valuation results.

    2.3 Related EPA Information Sources

    In addition to the ORD grants programs noted above, other EPA programs have an interest in research and policy development related to children's health and valuation. Information on activities of the Office of Children's Health Protection, a partner in this solicitation. The economy and environment program of the Office of Policy and Innovation has conducted and compiled a number of health valuation related studies. See particularly the results of a workshop on valuation of adult and children's health at:!OpenDocument.

    3.0 Funding

    EPA anticipates making approximately five to ten awards, totaling about $1 million. The projected range is from $50,000 to $200,000 per award per year, with durations from 1 to 3 years. Field experiments, survey research, and multi-investigator projects may justify the higher funding level. Awards made through this competition will depend on the availability of funds.

    4.0 Eligibility

    Academic and not-for-profit institutions located in the U.S., and state or local governments, are eligible under all existing authorizations. Profit-making firms are not eligible to receive grants from EPA under this program. Federal agencies and national laboratories funded by federal agencies (Federally-funded Research and Development Centers, FFRDCs) may not apply.

    Federal employees are not eligible to serve in a principal leadership role on a grant. FFRDC employees may cooperate or collaborate with eligible applicants within the limits imposed by applicable legislation and regulations. They may participate in planning, conducting, and analyzing the research directed by the principal investigator, but may not direct projects on behalf of the applicant organization or principal investigator. The principal investigator's institution may provide funds through its grant from EPA to a FFRDC for research personnel, supplies, equipment, and other expenses directly related to the research. However, salaries for permanent FFRDC employees may not be provided through this mechanism.

    Federal employees may not receive salaries or in other ways augment their agency's appropriations through grants made by this program. However, federal employees may interact with grantees so long as their involvement is not essential to achieving the basic goals of the grant.1 The principal investigator's institution may also enter into an agreement with a federal agency to purchase or utilize unique supplies or services unavailable in the private sector. Examples are purchase of satellite data, census data tapes, chemical reference standards, analyses, or use of instrumentation or other facilities not available elsewhere, etc. A written justification for federal involvement must be included in the application, along with an assurance from the federal agency involved which commits it to supply the specified service.

    1EPA encourages interaction between its own laboratory scientists and grant principal investigators for the sole purpose of exchanging information in research areas of common interest that may add value to their respective research activities. However, this interaction must be incidental to achieving the goals of the research under a grant. Interaction that is "incidental" is not reflected in a research proposal and involves no resource commitments.
    Potential applicants who are uncertain of their eligibility should contact Dr. Robert E. Menzer in NCER, phone (202) 564-6849, Email:

    5.0 Standard Instructions for Submitting an Application

    A set of special instructions on how applicants should apply for an NCER grant is found on the NCER web site, Standard Instructions for Submitting a STAR Application and the necessary forms for an application will be found on this web site.

    5.1 Sorting Codes

    The need for a sorting code to be used in the application and for mailing is described in the Standard Instructions for Submitting a STAR Application. The sorting code for applications submitted in response to this solicitation is 2000-STAR-H1. The deadline for receipt of the application by NCER is no later than 4:00 p.m. ET, June 6, 2000.

    5.2 Additional Requirements: Data development

    Please note that all data sets, models, and databases developed under these grants will become part of the public domain and henceforth will be freely available to all researchers. Applicants who develop databases containing proprietary or restricted information should provide a strategy, not to exceed two pages, to make the data widely available, while protecting privacy or property rights. These pages are in addition to the 15 pages permitted for the project description.

    6.0 Contacts

    Further information, if needed, may be obtained from the EPA officials indicated below. E-mail inquiries are preferred.

    Dr. Matthew Clark
    EPA National Center for Environmental Research
    fax (202) 565-2447, voice (202) 564-6842

    Dr. Robert E. Menzer
    EPA National Center for Environmental Research
    voice (202) 564-6849

    End of File.

    The  "Standard Instructions for Submitting a STAR Application"  and the required forms are found on our FORMS DOWNLOAD PAGE (Click)

    Last Updated: February 9, 2000