On the Value of Changes in Life Expectancy: Blips versus Parametric Changes
AbstractWe estimate the value of a 'blip', i.e. an immediate small reduction, in the hazard rate for a random sample of Swedes. Since the risk reduction is age-independent (2 'extra saved lives' out of 10,000 during the next year), we can examine how the value of a statistical life varies with age. We also show how blip data can be used to obtain a lower bound for the value of a permanent change in an individual's hazard rate. The value of a life exhibits an inverted-U shape with respect to age, peaking at the age of 40, and lies within the $3 to $7 million interval where most reasonable estimates are clustered according to Viscusi's (1992) survey. Copyright 1997 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal Journal of Risk and Uncertainty.
Volume (Year): 15 (1997)
Issue (Month): 3 (December)
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Web page: http://www.springerlink.com/link.asp?id=100299
Other versions of this item:
- Johannesson, Magnus & Johansson, Per-Olov & Löfgren, Karl-Gustaf, 1997. "On the Value of Changes in Life Expectancy: Blips versus Parametric Changes," Working Paper Series in Economics and Finance 152, Stockholm School of Economics.
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