Heterogeneity in the Value of Life

Joseph Aldy and Seamus J. Smyth

No 20206, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D91 J17 Q51 (search for similar items in EconPapers)
Date: 2014-06
New Economics Papers: this item is included in nep-dcm and nep-rmg
Note: EEE
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Citations: View citations in EconPapers (10)

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