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Quality of life and the WTP for an increased life expectancy at an advanced age

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  • Johannesson, Magnus
  • Johansson, Per-Olov

Abstract

In this study we report an attempt to measure the value adult Swedes impute to an increased survival probability at high ages. A rating scale between the worst possible quality of life (=1) and the best possible quality of life (=10) is used to indicate the quality of life a person expects to achieve at an advanced age. We find a highly significant correlation between this quality measure and the insurance premium a person is willing to pay in exchange for a programme increasing the expected lengt of life by one year, conditional on having survived until the age of 75 years. The (maximum) insurance premium the average person is willing to pay for such a progrtamme is less than $1,500. The willingness to pay seems to increase with a person's age, but at a low rate. The implied average marginal rate of time preference is in the range 0.5-1.5 percent.
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  • Johannesson, Magnus & Johansson, Per-Olov, 1997. "Quality of life and the WTP for an increased life expectancy at an advanced age," Journal of Public Economics, Elsevier, vol. 65(2), pages 219-228, August.
  • Handle: RePEc:eee:pubeco:v:65:y:1997:i:2:p:219-228
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    Citations

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    Cited by:

    1. Julia Fimpel & Michael Stolpe, 2010. "The welfare costs of HIV/AIDS in Eastern Europe: an empirical assessment using the economic value-of-life approach," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 11(3), pages 305-322, June.
    2. Lawless, Lydia J.R. & Drichoutis, Andreas & Nayga, Rodolfo & Threlfall, Renee T. & Meullenet, Jean-François, 2012. "Identifying product attributes and consumer attitudes that impact willingness-to-pay for a nutraceutical-rich juice product," MPRA Paper 53023, University Library of Munich, Germany, revised 18 Jan 2014.
    3. Glenn C. Blomquist, 2004. "Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy," Review of Economics of the Household, Springer, vol. 2(1), pages 89-110, March.
    4. Olivier Chanel & Pascale Scapecchi & Jean-Christophe Vergnaud, 2006. "How to correctly assess mortality benefits in public policies," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 49(5), pages 759-776.
    5. Guillem López-Casasnovas & Berta Rivera, 2002. "Las políticas de equidad en salud y las relaciones entre renta y salud," Hacienda Pública Española, IEF, vol. 161(2), pages 99-126, June.
    6. Johannesson, Magnus & Johansson, Per-Olov, 1997. "Quality of life and the WTP for an increased life expectancy at an advanced age," Journal of Public Economics, Elsevier, vol. 65(2), pages 219-228, August.
    7. Johansson-Stenman, Olof & Martinsson, Peter, 2003. "Are Some Lives More Valuable?," Working Papers in Economics 96, University of Gothenburg, Department of Economics.
    8. R. Brau & M. Lippi Bruni & AM. Pinna, 2004. "Public vs private demand for covering long term care expenditures," Working Paper CRENoS 200408, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    9. Rachel Baker & Anna Bartczak & Susan Chilton & Hugh Metcalf, 2012. "Did people "buy" what was "sold"? A qualitative evaluation a Contingent Valuation survey information set for gains in life expectancy," Working Papers 2012-16, Faculty of Economic Sciences, University of Warsaw.
    10. Andrew Meyer, 2013. "Estimating discount factors for public and private goods and testing competing discounting hypotheses," Journal of Risk and Uncertainty, Springer, vol. 46(2), pages 133-173, April.
    11. Edward Calthrop & Stef Proost, 1998. "Road Transport Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 335-348, April.
    12. Fimpel, Julia & Stolpe, Michael, 2006. "The welfare costs of HIV/AIDS in Eastern Europe: An empirical assessment using the economic value-of-life approach," Kiel Working Papers 1297, Kiel Institute for the World Economy (IfW).
    13. Henrik Hammar & Olof Johansson-Stenman, 2004. "The value of risk-free cigarettes - do smokers underestimate the risk?," Health Economics, John Wiley & Sons, Ltd., vol. 13(1), pages 59-71.
    14. Leguizamon, Susane & Christafore, David, 2014. "Racial Differences in Willingness to Pay for Hospital Access," MPRA Paper 55926, University Library of Munich, Germany.
    15. Tilling, C & Krol, M & Tsuchiya, A & Brazier, J & van Exel, J & Brouwer, W, 2009. "Measuring the value of life: exploring a new method for deriving the monetary value of a QALY," MPRA Paper 29911, University Library of Munich, Germany.
    16. Johannesson, Magnus & Johansson, Per-Olov & Soderqvist, Tore, 1998. "Time spent on waiting lists for medical care: an insurance approach," Journal of Health Economics, Elsevier, vol. 17(5), pages 627-644, October.
    17. A. Freeman, 2006. "Valuing Environmental Health Effects – An Economic Perspective," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(3), pages 347-363, July.
    18. Delucchi, Mark & Murphy, James & McCubbin, Donald, 2002. "The Health and Visibility Cost of Air Pollution: A Comparison of Estimation Methods," Institute of Transportation Studies, Working Paper Series qt03s2x9xb, Institute of Transportation Studies, UC Davis.
    19. Costa-Font, Joan & Rovira-Forns, Joan, 2008. "Who is willing to pay for long-term care insurance in Catalonia?," Health Policy, Elsevier, vol. 86(1), pages 72-84, April.
    20. Fu, Tsu-Tan & Lin, Yih-Ming & Huang, Chung L., 2011. "Willingness to pay for obesity prevention," Economics & Human Biology, Elsevier, vol. 9(3), pages 316-324, July.
    21. Thijs Dekker & Roy Brouwer & Marjan Hofkes & Klaus Moeltner, 2011. "The Effect of Risk Context on the Value of a Statistical Life: a Bayesian Meta-model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(4), pages 597-624, August.
    22. Hostenkamp, Gisela & Stolpe, Michael, 2008. "The social costs of health-related early retirement in Germany: Evidence from the German Socio-economic panel," Kiel Working Papers 1415, Kiel Institute for the World Economy (IfW).
    23. Burtraw, Dallas & Krupnick, Alan, 1999. "Measuring the Value of Health Improvements from Great Lakes Cleanup," Discussion Papers dp-99-34, Resources For the Future.
    24. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    25. K. R. Shanmugam, 2011. "Discount Rate for Health Benefits and the Value of Life in India," Working Papers id:4524, eSocialSciences.

    More about this item

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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