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Does the Value of a Statistical Life Vary with Age and Health Status? Evidence from the United States and Canada

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  • Krupnick, Alan

    ()
    (Resources for the Future)

  • Cropper, Maureen
  • Alberini, Anna
  • Simon, Nathalie

Abstract

Much of the justification for environmental rulemaking rests on estimates of the benefits to society of reduced mortality rates. Yet the literature providing estimates of the willingness to pay (WTP) for mortality risk reductions measures the value that healthy, prime-aged adults place on reducing their risk of dying, whereas the majority of statistical lives saved by environmental programs, according to epidemiological studies, appear to be the lives of older people and people with chronically impaired health. This paper provides an empirical assessment of the effects of age and baseline health on WTP for mortality risk reductions by reporting the results of two contingent valuation surveys designed to test the above hypotheses. One survey was administered in-person to residents of Hamilton, Ontario, and the other to a nationally representative sample of U.S. residents using the Internet. Both surveys elicited respondents’ WTP for reductions in mortality risk of different magnitudes. Respondents were limited to persons aged 40 years and older, including those older than 60, to examine the impact of age on WTP. Extensive information was collected about each respondent’s health status to see whether it systematically influenced WTP. Our results provide weak support for the notion that WTP declines with age, but only after age 70. Specifically, in our Canadian sample, WTP declines by about 30% after age 70 compared with WTP at younger ages. There is no such statistically significant decline, however, in the U.S. sample. We similarly find no support for the idea that people who have cancer or chronic heart or lung disease are willing to pay less to reduce their risk of dying than people without these illnesses. If anything, people with these illnesses are willing to pay more.

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Bibliographic Info

Paper provided by Resources For the Future in its series Discussion Papers with number dp-02-19.

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Date of creation: 20 Apr 2002
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Handle: RePEc:rff:dpaper:dp-02-19

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Related research

Keywords: willingness to pay; mortality; contingent valuation; age; health status;

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References

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  1. Cropper, Maureen L. & G. Sussman, Frances, 1990. "Valuing future risks to life," Journal of Environmental Economics and Management, Elsevier, vol. 19(2), pages 160-174, September.
  2. Moore, Michael J & Viscusi, W Kip, 1988. "The Quantity-Adjusted Value of Life," Economic Inquiry, Western Economic Association International, vol. 26(3), pages 369-88, July.
  3. Jones-Lee, M W & Hammerton, M & Philips, P R, 1985. "The Value of Safety: Results of a National Sample Survey," Economic Journal, Royal Economic Society, vol. 95(377), pages 49-72, March.
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Cited by:
  1. Bryan Hubbell, 2006. "Implementing QALYs in the Analysis of Air Pollution Regulations," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 34(3), pages 365-384, July.
  2. Jin-Tan Liu & James K. Hammitt, 2003. "Effects of Disease Type and Latency on the Value of Mortality Risk," NBER Working Papers 10012, National Bureau of Economic Research, Inc.
  3. Anna Alberini, 2004. "Robustness of VSL Values from Contingent Valuation Surveys," Working Papers 2004.135, Fondazione Eni Enrico Mattei.
  4. Takahiro Tsuge & Atsuo Kishimoto & Kenji Takeuchi, 2005. "A Choice Experiment Approach to the Valuation of Mortality," Journal of Risk and Uncertainty, Springer, vol. 31(1), pages 73-95, July.

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