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Does age matter for the value of life? - Evidence from a choice experiment in rural Bangladesh

Author

Listed:
  • Johansson-Stenman, Olof

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Mahmud, Minhaj

    (Queen’s University Belfast)

  • Martinsson, Peter

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

Using a random sample of individuals in rural Bangladesh, this paper investigates people’s preferences regarding relative values of lives when it comes to different ages of the individuals being saved. By assuming that an individual has preferences concerning different states of the world, and that these preferences can be described by an individual social welfare function, the individuals’ preferences for life-saving programs are elicited using a pair-wise choice experiment between different life-saving programs. In the analyses, we calculate the social marginal rates of substitution between saved lives of people of different ages. We also test whether people have preferences for saving more life-years rather than only saving lives. In particular, we test and compare the two hypotheses that only lives matter and that only life-years matter. The results indicate that the value of a saved life decreases rapidly with age and that people have strong preferences for saving life-years rather than lives per se. Overall, the results clearly show the importance of the number of life-years saved in the valuation of life.

Suggested Citation

  • Johansson-Stenman, Olof & Mahmud, Minhaj & Martinsson, Peter, 2009. "Does age matter for the value of life? - Evidence from a choice experiment in rural Bangladesh," Working Papers in Economics 389, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0389
    Note: Published in Health Economics, 2011, Vol. 20, pp. 723-736.
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    More about this item

    Keywords

    social preferences; life-saving programs; choice experiment; relative value of life;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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