IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/vcontributions.5y2006i1n4.html
   My bibliography  Save this article

Life-Cycle Consumption and the Age-Adjusted Value of Life

Author

Listed:
  • Kniesner Thomas J

    () (Syracuse University)

  • Viscusi W. Kip

    () (Harvard University)

  • Ziliak James P

    () (University of Kentucky)

Abstract

Our research presents new evidence on the age pattern of the implicit value of life revealed from workers' differential wages and job safety pairings. Although aging reduces the number of years of life expectancy, aging can affect the value of life through an effect on planned life-cycle consumption. The elderly could, a priori, have the highest implicit value of life if there is a life-cycle plan to defer consumption until old age. We find that largely due to the age pattern of consumption, which is non-constant, the implicit value of life rises and falls over the lifetime in a way that the value for the elderly is higher than the average over all ages or for the young. There are important health policy implications of our empirical results. Because there may be age-specific benefits of programs to save statistical lives, instead of valuing the lives of the elderly at less than the young, health policymakers should more correctly value the lives of the elderly at as much as twice the young because of relatively greater consumption lost when accidental death occurs.

Suggested Citation

  • Kniesner Thomas J & Viscusi W. Kip & Ziliak James P, 2006. "Life-Cycle Consumption and the Age-Adjusted Value of Life," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-36, January.
  • Handle: RePEc:bpj:bejeap:v:contributions.5:y:2006:i:1:n:4
    as

    Download full text from publisher

    File URL: https://www.degruyter.com/view/j/bejeap.2005.5.issue-1/bejeap.2006.5.1.1524/bejeap.2006.5.1.1524.xml?format=INT
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kevin Lang & Sumon Majumdar, 2003. "The Pricing of Job Characteristics When Markets Do Not Clear: Theory and Implications," NBER Working Papers 9911, National Bureau of Economic Research, Inc.
    2. Arthur, W B, 1981. "The Economics of Risks to Life," American Economic Review, American Economic Association, vol. 71(1), pages 54-64, March.
    3. Rosen, Sherwin, 1988. "The Value of Changes in Life Expectancy," Journal of Risk and Uncertainty, Springer, vol. 1(3), pages 285-304, September.
    4. Bruce D. Meyer & James X. Sullivan, 2003. "Measuring the Well-Being of the Poor Using Income and Consumption," NBER Working Papers 9760, National Bureau of Economic Research, Inc.
    5. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    6. Johannesson, Magnus & Johansson, Per-Olov & Lofgren, Karl-Gustaf, 1997. "On the Value of Changes in Life Expectancy: Blips versus Parametric Changes," Journal of Risk and Uncertainty, Springer, vol. 15(3), pages 221-239, December.
    7. Garen, John, 1988. "Compensating Wage Differentials and the Endogeneity of Job Riskiness," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 9-16, February.
    8. W. Kip Viscusi, 2004. "The Value of Life: Estimates with Risks by Occupation and Industry," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 29-48, January.
    9. Johansson, Per-Olov, 2001. "Is there a meaningful definition of the value of a statistical life?," Journal of Health Economics, Elsevier, vol. 20(1), pages 131-139, January.
    10. Johansson, Per-Olov, 2002. "On the Definition and Age-Dependency of the Value of a Statistical Life," Journal of Risk and Uncertainty, Springer, vol. 25(3), pages 251-263, November.
    11. repec:reg:rpubli:282 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aldy, Joseph E. & Viscusi, W. Kip, 2007. "Age Differences in the Value of Statistical Life: Revealed Preference Evidence," Discussion Papers dp-07-05, Resources For the Future.
    2. Isaac Ehrlich & Yong Yin, 2005. "Explaining Diversities in Age-Specific Life Expectancies and Values of Life Saving: A Numerical Analysis," Journal of Risk and Uncertainty, Springer, vol. 31(2), pages 129-162, September.
    3. Antoine Bommier & Bertrand Villeneuve, 2012. "Risk Aversion and the Value of Risk to Life," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 79(1), pages 77-104, March.
    4. Joseph E. Aldy & Seamus J. Smyth, 2014. "Heterogeneity in the Value of Life," NBER Working Papers 20206, National Bureau of Economic Research, Inc.
    5. W. Viscusi, 2008. "How to value a life," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 32(4), pages 311-323, October.
    6. Stavins, Robert, 2004. "Introduction to the Political Economy of Environmental Regulation," Working Paper Series rwp04-004, Harvard University, John F. Kennedy School of Government.
    7. Per-Olov JOHANSSON, 2006. "On the definition and estimation of the value of a “statistical life”," Departmental Working Papers 2006-23, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    8. Guang-Zhen Sun & Yew-Kwang Ng, 2008. "Finite Life Expectancy And The Age-Dependent Value Of A Statistical Life," Monash Economics Working Papers 12/08, Monash University, Department of Economics.
    9. Gentry, Elissa Philip & Viscusi, W. Kip, 2016. "The fatality and morbidity components of the value of statistical life," Journal of Health Economics, Elsevier, vol. 46(C), pages 90-99.
    10. Anna Alberini & Maureen Cropper & Alan Krupnick & Nathalie Simon, 2006. "Willingness to pay for mortality risk reductions: Does latency matter?," Journal of Risk and Uncertainty, Springer, vol. 32(3), pages 231-245, May.
    11. Emre Ozdenoren & Stephen W. Salant & Dan Silverman, 2012. "Willpower And The Optimal Control Of Visceral Urges," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 342-368, April.
    12. Kip Viscusi, W. & Aldy, Joseph E., 2007. "Labor market estimates of the senior discount for the value of statistical life," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 377-392, May.
    13. Myers, Robert J., 2006. "On the costs of food price fluctuations in low-income countries," Food Policy, Elsevier, vol. 31(4), pages 288-301, August.
    14. Viscusi, W. Kip & Hersch, Joni, 2008. "The mortality cost to smokers," Journal of Health Economics, Elsevier, vol. 27(4), pages 943-958, July.
    15. Xuehui Han & Yuan Cheng, 2017. "Consumption- and Productivity-Adjusted Dependency Ratio with Household Structure Heterogeneity," Working Papers id:12339, eSocialSciences.
    16. W. Viscusi, 2010. "The heterogeneity of the value of statistical life: Introduction and overview," Journal of Risk and Uncertainty, Springer, vol. 40(1), pages 1-13, February.
    17. Jon Strand, 2005. "Individual and Household Values of Mortality Reductions with Intrahousehold Bargaining," Journal of Risk and Uncertainty, Springer, vol. 31(2), pages 217-236, September.
    18. Soma Bhattacharya & Anna Alberini & Maureen Cropper, 2007. "The value of mortality risk reductions in Delhi, India," Journal of Risk and Uncertainty, Springer, vol. 34(1), pages 21-47, February.
    19. Thomas J. Kniesner & W. Kip Viscusi, 2005. "Value of a Statistical Life: Relative Position vs. Relative Age," American Economic Review, American Economic Association, vol. 95(2), pages 142-146, May.
    20. Joseph E. Aldy & W. Kip Viscusi, 2007. "Age Differences in the Value of Statistical Life: Revealed Preference Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 1(2), pages 241-260, Summer.
    21. Thomas J. Kniesner & W. Kip Viscusi & Christopher Woock & James P. Ziliak, 2006. "Pinning Down the Value of Statistical Life," Center for Policy Research Working Papers 85, Center for Policy Research, Maxwell School, Syracuse University.
    22. repec:dau:papers:123456789/4812 is not listed on IDEAS

    More about this item

    JEL classification:

    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:contributions.5:y:2006:i:1:n:4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: https://www.degruyter.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.