Risk Aversion and the Value of Risk to Life

Antoine Bommier and Bertrand Villeneuve

MPRA Paper from University Library of Munich, Germany

Abstract: The standard literature on the value of life relies on Yaari’s (1965) model, which includes an implicit assumption of risk neutrality with respect to life duration. To overpass this limitation, we extend the theory to a simple variety of nonadditively separable preferences. The enlargement we propose is relevant for the evaluation of life-saving programs: current practice, we estimate, puts too little weight on mortality risk reduction of the young. Our correction exceeds in magnitude that introduced by the switch from the notion of number of lives saved to the notion of years of life saved.

Keywords: Value of Statistical Life; Lifecycle Behavior; Cost-benefit Analysis (search for similar items in EconPapers)
JEL-codes: D61 D81 D91 I18 J17 (search for similar items in EconPapers)
Date: 2008-06-10
New Economics Papers: this item is included in nep-hea, nep-ias and nep-upt
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Related works:
Journal Article: Risk Aversion and the Value of Risk to Life (2012)
Working Paper: Risk Aversion and the Value of Risk to Life (2012)
Working Paper: Risk Aversion and the Value of Risk to Life (2010)
Working Paper: Risk Aversion and the Value of Risk to Life (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:11943

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