Monetary values of increasing life expectancy: Sensitivity to shifts of the survival curve

James Hammitt and Tuba Tunçel
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Tuba Tunçel: Florida State University

Journal of Risk and Uncertainty, 2023, vol. 67, issue 3, No 2, 239-269

Abstract: Abstract Individuals’ monetary values of decreases in mortality risk depend on the magnitude and timing of the risk reduction. We elicited stated preferences among three time paths of risk reduction yielding the same increase in life expectancy (decreasing risk for the next decade, subtracting a constant from or multiplying risk by a constant in all future years) and willingness to pay (WTP) for risk reductions differing in timing and life-expectancy gain. Respondents exhibited heterogeneous preferences over the alternative time paths, with almost 90 percent reporting transitive orderings. WTP is statistically significantly associated with life-expectancy gain (between about 7 and 28 days) and with respondents’ stated preferences over the alternative time paths. Estimated value per statistical life year (VSLY) can differ by time path and averages about $500,000, roughly consistent with conventional estimates obtained by dividing estimated value per statistical life by discounted life expectancy.

Keywords: Value per statistical life; Value per statistical life year; Mortality risk; Stated preference (search for similar items in EconPapers)
JEL-codes: D61 I18 Q51 (search for similar items in EconPapers)
Date: 2023
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Working Paper: Monetary values of increasing life expectancy: sensitivity to shifts of the survival curve (2023)
Working Paper: Monetary values of increasing life expectancy: sensitivity to shifts of the survival curve (2023)
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DOI: 10.1007/s11166-023-09406-2

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