Individual and household value of mortality reductions with intrahousehold bargaining

Jon Strand

No 2004:2, HERO Online Working Paper Series from University of Oslo, Health Economics Research Programme

Abstract: I derive alternative measures of maximum willingness to pay (WTP) and value of statistical life (VSL) related to changes in the supply of a public good affecting mortality for both members of two-person households, when members are selfish, live for at most two periods, and strike efficient Nash bargains over consumption of individual and household goods. I find no systematic bias in letting one household member conduct the (WTP or VSL) valuation on behalf of the household. Publicgood VSL may exceed private-good VSL due to each member attaching (purely selfish) preferences to the event that the other member survives or dies, and to a possible net income potential of the other member when surviving in period 2. When period 2 is a retirement period and household members’ incomes are then fixed, interview surveys tend to overvalue VSL due to ignored negative effects of own survival on government pension budgets.

Keywords: Value of statistical life; household bargaining; intertemporal allocation models; optimal life insurance (search for similar items in EconPapers)
JEL-codes: I18 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2009-06-14
New Economics Papers: this item is included in nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Individual and Household Values of Mortality Reductions with Intrahousehold Bargaining (2005)
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