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Valuation of human health: An integrated model of willingness to pay for mortality and morbidity risk reductions

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  • Gerking, Shelby
  • Dickie, Mark
  • Veronesi, Marcella

Abstract

This paper develops and applies an integrated model of mortality and morbidity valuation that is consistent with the principles of welfare economics. To obtain the integrated model, the standard one-period expected utility model of one person facing the prospect of either being alive or dead is extended to incorporate (1) a third health state (sick) with a utility level that is intermediate to utility if healthy and utility if dead, (2) a family perspective in which a parent makes choices about risk exposure both for herself and for a child, and (3) a multi-period framework that allows for possible parent/child differences in illness latency. Monetary benefits of health risk reduction obtained from the integrated model are compared with those that would be computed using the standard model. The integrated model then is applied using data obtained from two field studies of skin cancer and leukemia to demonstrate how it can be used to estimate health benefits of reduced illness and death risks.

Suggested Citation

  • Gerking, Shelby & Dickie, Mark & Veronesi, Marcella, 2014. "Valuation of human health: An integrated model of willingness to pay for mortality and morbidity risk reductions," Journal of Environmental Economics and Management, Elsevier, vol. 68(1), pages 20-45.
  • Handle: RePEc:eee:jeeman:v:68:y:2014:i:1:p:20-45
    DOI: 10.1016/j.jeem.2013.11.010
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    References listed on IDEAS

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    Cited by:

    1. Martina Menon & Federico Perali & Marcella Veronesi, 2013. "Preferences for Social Inclusion: Empirical Evidence from Juvenile Rehabilitation in Italy," Working Papers 18/2013, University of Verona, Department of Economics.
    2. Veronesi, Marcella & Chawla, Fabienne & Maurer, Max & Lienert, Judit, 2014. "Climate change and the willingness to pay to reduce ecological and health risks from wastewater flooding in urban centers and the environment," Ecological Economics, Elsevier, vol. 98(C), pages 1-10.
    3. repec:elg:eechap:17527_2 is not listed on IDEAS
    4. Veronesi, Marcella & Reutemann, Tim & Zabel, Astrid & Engel, Stefanie, 2015. "Designing REDD+ schemes when forest users are not forest landowners: Evidence from a survey-based experiment in Kenya," Ecological Economics, Elsevier, vol. 116(C), pages 46-57.
    5. repec:kap:jrisku:v:55:y:2017:i:2:d:10.1007_s11166-017-9267-x is not listed on IDEAS
    6. Rheinberger, Christoph M. & Herrera-Araujo, Daniel & Hammitt, James K., 2016. "The value of disease prevention vs treatment," Journal of Health Economics, Elsevier, vol. 50(C), pages 247-255.
    7. Hammitt, James K. & Herrera-Araujo, Daniel & Rheinberger, Christoph, 2016. "The Value of Cancer Prevention vs Treatment," TSE Working Papers 16-628, Toulouse School of Economics (TSE).
    8. repec:kap:enreec:v:67:y:2017:i:3:d:10.1007_s10640-016-0033-3 is not listed on IDEAS
    9. George Parsons & Kelley Myers, 2017. "Fat tails and truncated bids in contingent valuation: an application to an endangered shorebird species," Chapters,in: Contingent Valuation of Environmental Goods, chapter 2, pages 17-42 Edward Elgar Publishing.
    10. Christoph M. Rheinberger & Nicolas Treich, 2017. "Attitudes Toward Catastrophe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 609-636, July.

    More about this item

    Keywords

    Willingness to pay; Children; Environmental hazards; Integrated model; Morbidity; Mortality; Illness latency; Value of a statistical life; Cancer; Stated preference;

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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