Valuing lives equally: Distributional weights for welfare analysis
AbstractCost-benefit analysis as performed by governments and public-sector organisations typically applies equal weights to changes in incomes accruing to individuals from projects even when there is no proposal to compensate losers. One reason for the use of equal weights despite the absence of a theoretical justification for this practice is that all weights appear arbitrary. This note proposes the use of weights based on two axioms: (1) that all lives should be equally valued, and (2) that the monetary value attached to a person's life should be his or her own. This implies weights that are proportional to the reciprocals of the values of statistical lives
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Bibliographic InfoPaper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 03-02.
Length: 5 pages
Date of creation: Mar 2003
Date of revision:
cost-benefit analysis; social welfare; value of life; distributional weights;
Other versions of this item:
- Somanathan, E., 2006. "Valuing lives equally: Distributional weights for welfare analysis," Economics Letters, Elsevier, vol. 90(1), pages 122-125, January.
- D60 - Microeconomics - - Welfare Economics - - - General
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-06-02 (All new papers)
- NEP-HEA-2004-06-02 (Health Economics)
- NEP-MIC-2004-01-08 (Microeconomics)
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