Value of Risky Lifestyle Choices

Using data from the Panel Study of Income Dynamics on breast cancer diagnosis and lifestyle choices, we estimate how being diagnosed influences smoking, drinking, and exercising habits for more than 9,000 women over the period 1999 to 2011. These data allow us to learn more about the trade-offs women are willing to make between participating in unhealthy (but enjoyable) habits and increasing one's life expectancy. Our parameter estimates indicate that the impact of diagnosis has a different effect on smoking, drinking, and exercising behavior, and the impact also depends upon the recency of the diagnosis. We find that recently diagnosed women exercise and smoke less but do not change their drinking habits relative to healthy women. These changes are not always consistent with public information on cancer risk factors, but are rationalized after considering that lifestyle choices increase the utility of living. For a woman diagnosed with breast cancer, our results indicate that a woman will smoke only if the value placed on smoking is greater than 6% of the total utility from being alive. We find the threshold is lower for drinking where drinking has a positive impact on the value of life if the value placed on drinking is greater than 3% of the total utility from being alive. Finally, a woman with breast cancer will find it valuable to engage in exercise even when it brings disutility of 3% of the value of living. Using conventional estimates for the value of a year of life, we find that these choices imply that, per year, women value smoking at about $49,000 for smokers, drinking at about $29,500 for drinkers, and exercising at about $28,200 for exercisers.