Valuation of Human Health: An Integrated Model of Willingness to Pay for Mortality and Morbidity Risk Reductions

Shelby Gerking, Mark Dickie () and Marcella Veronesi

No 201207, NCEE Working Paper Series from National Center for Environmental Economics, U.S. Environmental Protection Agency

Abstract: This paper develops and applies an integrated model of human mortality and morbidity valuation that is consistent with principles of welfare economics. The standard expected utility model of one person facing two health states (alive and dead) is extended to a setting in which two family members (a parent and a child) face three health states (healthy, sick, and dead). A key finding is that total health benefits of public programs equate to the sum of willingness to pay for reduced mortality risk plus a fraction of the willingness to pay for reduced morbidity risk. Implications of the integrated model are tested using two field data sets from the U.S. on skin cancer and leukemia risk reductions. Results obtained show how the integrated model can be used to increase the accuracy of health benefit estimation for benefit-cost analyses as well as for the design of public hazard reduction programs.

Keywords: willingness to pay; children; environmental hazards; health; integrated analysis; morbidity; mortality; value of statistical life; cancer; stated preference (search for similar items in EconPapers)
JEL-codes: Q51 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2012-10, Revised 2012-10
New Economics Papers: this item is included in nep-dem, nep-env and nep-hea
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Citations: View citations in EconPapers (5)

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https://www.epa.gov/environmental-economics/workin ... odel-willingness-pay First version, 2012 (application/pdf)

Related works:
Journal Article: Valuation of human health: An integrated model of willingness to pay for mortality and morbidity risk reductions (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:nev:wpaper:wp201207

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