Does age matter for the value of life? - Evidence from a choice experiment in rural Bangladesh

Olof Johansson-Stenman (), Minhaj Mahmud and Peter Martinsson

No 389, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: Using a random sample of individuals in rural Bangladesh, this paper investigates people’s preferences regarding relative values of lives when it comes to different ages of the individuals being saved. By assuming that an individual has preferences concerning different states of the world, and that these preferences can be described by an individual social welfare function, the individuals’ preferences for life-saving programs are elicited using a pair-wise choice experiment between different life-saving programs. In the analyses, we calculate the social marginal rates of substitution between saved lives of people of different ages. We also test whether people have preferences for saving more life-years rather than only saving lives. In particular, we test and compare the two hypotheses that only lives matter and that only life-years matter. The results indicate that the value of a saved life decreases rapidly with age and that people have strong preferences for saving life-years rather than lives per se. Overall, the results clearly show the importance of the number of life-years saved in the valuation of life.

Keywords: social preferences; life-saving programs; choice experiment; relative value of life (search for similar items in EconPapers)
JEL-codes: D63 I18 J17 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2009-10-19
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-exp, nep-hea and nep-ltv
Note: Published in Health Economics, 2011, Vol. 20, pp. 723-736.
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Published as Johansson-Stenman, Olof, Minhaj Mahmud and Peter Martinsson, 'Does age matter for the value of life? - Evidence from a choice experiment in rural Bangladesh' in Health Economics, 2011, pages 723-736.

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