0
$\begingroup$

I would appreciate any consideration given to the question I have with respect to a document published by the UK Dept. of Transport.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/639211/research-into-valuing-health-impacts-in-transport-appraisal.pdf

Here, on page 20 (Table 11) of this report, the authors use standard discounted cash flow methods for discounting future costs/future monetisable benefits.

In particular, with an actuarial year of life lived (YLL) set equal to £60,000, they estimate that in 3.92 YLLs in 2012 should be worth £228,476.34.

However, when I use standard discounting formulas in which £60,000 is discounted by 0.015; or discount YLLs by 0.015, I can only seem to get approximately £228,114.

If someone with expertise had 10 mins to sink their teeth into this, would it possible to show how £228,476.34 on Table 11 was obtained please?

$\endgroup$

1 Answer 1

2
$\begingroup$

I see that the subsequent years are discounted using 1.5%: \begin{eqnarray} 228,476.34\, /\, 225,099.84 - 1 = 1.5\% \\ 225,099.84\, /\, 221,773.25 - 1 = 1.5\% \end{eqnarray} If you allow that the YLL displayed as 3.92 is actually 3.9230339 but rounded then $$1.015^{-2} \times 60.000 \times YLL = 228,476.34$$

$\endgroup$
1
  • 2
    $\begingroup$ Thanks Bob :) I appreciate your time. $\endgroup$
    – EB3112
    Dec 4, 2021 at 15:38

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge that you have read and understand our privacy policy and code of conduct.

Not the answer you're looking for? Browse other questions tagged or ask your own question.