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Heterogeneity in the Value of Life

Joseph Aldy () and Seamus J Smyth

Scholarly Articles from Harvard Kennedy School of Government

Abstract: We develop a numerical life-cycle model - with choice over consumption and leisure, stochastic mortality and labor income processes, and calibrated to U.S. data - to characterize willingness to pay (WTP) for mortality risk reduction. Our theoretical framework can explain many empirical findings in this literature, including an inverted-U life-cycle WTP and an order of magnitude difference in prime-aged adults WTP. By endogenizing leisure and employing multiple income measures, we reconcile the literature's large variation in estimated income elasticities. By accounting for gender-and race-specific stochastic mortality and income processes,we explain the literature's black-white and female-male differences.

Date: 2014
New Economics Papers: this item is included in nep-rmg
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Citations: View citations in EconPapers (9)

Published in HKS Faculty Research Working Paper Series

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http://dash.harvard.edu/bitstream/handle/1/2301724 ... e_RWP14-024_Aldy.pdf (application/pdf)

Related works:
Working Paper: Heterogeneity in the Value of Life (2014) Downloads
Working Paper: Heterogeneity in the Value of Life (2014) Downloads
Working Paper: Heterogeneity in the Value of Life (2014) Downloads
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