Quality of Life and the WTP for an Increased Life Expectancy at an Advanced Age
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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|Date of creation:||Nov 1995|
|Publication status:||Published in Journal of Public Economics, 1997, pages 219-228.|
|Contact details of provider:|| Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden|
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
Web page: http://www.hhs.se/
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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.
- Johannesson, Magnus & Johansson, Per-Olov, 1995. "Quality of Life and the WTP for an Increased Life Expectancy at an Advanced Age," SSE/EFI Working Paper Series in Economics and Finance 85, Stockholm School of Economics.
- Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-266, March.
- Johansson,Per-Olov, 1995. "Evaluating Health Risks," Cambridge Books, Cambridge University Press, number 9780521472852, October. Full references (including those not matched with items on IDEAS)
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