Fair Innings? The Utilitarian and Prioritarian Value of Risk Reduction over a Whole Lifetime
James Hammitt and
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Matthew Adler: Duke University School of Law
Maddalena Ferranna: TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Nicolas Treick: TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, GenPhySE - Génétique Physiologie et Systèmes d'Elevage - ENVT - Ecole Nationale Vétérinaire de Toulouse - Toulouse INP - Institut National Polytechnique (Toulouse) - Université Fédérale Toulouse Midi-Pyrénées - École nationale supérieure agronomique de Toulouse [ENSAT] - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
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The social value of risk reduction (SVRR) is the marginal social value of reducing an individual's fatality risk, as measured by some social welfare function (SWF). This Article investigates SVRR, using a lifetime utility model in which individuals are differentiated by age, lifetime income profile, and lifetime risk profile. We consider both the utilitarian SWF and a "prioritarian" SWF, which applies a strictly increasing and strictly concave transformation to individual utility. We show that the prioritarian SVRR provides a rigorous basis in economic theory for the "fair innings" concept, proposed in the public health literature: as between an older individual and a similarly situated younger individual (one with the same income and risk profile), a risk reduction for the younger individual is accorded greater social weight even if the gains to expected lifetime utility are equal. The comparative statics of prioritarian and utilitarian SVRRs with respect to age, and to (past, present, and future) income and baseline survival probability, are significantly different from the conventional value per statistical life (VSL). Our empirical simulation based upon the U.S. population survival curve and income distribution shows that prioritarian SVRRs with a moderate degree of concavity in the transformation function conform to widely held views regarding lifesaving policies: the young should take priority but income should make no difference.
Keywords: Benefit-cost analysis (BCA); Social welfare function (SWF); Isk regulation; Prioritarian; Utilitarian; Social value of risk reduction (SVRR); Innings; Fair; Value of statistical life (VSL) (search for similar items in EconPapers)
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Published in Journal of Health Economics, Elsevier, 2021, 75, pp.1-59. ⟨10.1016/j.jhealeco.2020.102412⟩
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Journal Article: Fair innings? The utilitarian and prioritarian value of risk reduction over a whole lifetime (2021)
Working Paper: Fair Innings? The Utilitarian and Prioritarian Value of Risk Reduction over a Whole Lifetime (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03097444
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