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Individual and household value of mortality reductions with intrahousehold bargaining

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  • Strand, Jon

    () (Department of Economics)

Abstract

I derive alternative measures of maximum willingness to pay (WTP) and value of statistical life (VSL) related to changes in the supply of a public good affecting mortality for both members of two-person households, when members are selfish, live for at most two periods, and strike efficient Nash bargains over consumption of individual and household goods. I find no systematic bias in letting one household member conduct the (WTP or VSL) valuation on behalf of the household. Publicgood VSL may exceed private-good VSL due to each member attaching (purely selfish) preferences to the event that the other member survives or dies, and to a possible net income potential of the other member when surviving in period 2. When period 2 is a retirement period and household members’ incomes are then fixed, interview surveys tend to overvalue VSL due to ignored negative effects of own survival on government pension budgets.

Suggested Citation

  • Strand, Jon, 2009. "Individual and household value of mortality reductions with intrahousehold bargaining," HERO Online Working Paper Series 2004:2, University of Oslo, Health Economics Research Programme.
  • Handle: RePEc:hhs:oslohe:2004_002
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    File URL: http://www.hero.uio.no/publicat/2004/HERO2004_2.pdf
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    2. Lindhjem, Henrik, 2007. "20 years of stated preference valuation of non-timber benefits from Fennoscandian forests: A meta-analysis," Journal of Forest Economics, Elsevier, vol. 12(4), pages 251-277, February.
    3. Gregory Ponthiere, 2016. "The contribution of improved joint survival conditions to living standards: an equivalent consumption approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(2), pages 407-449, February.
    4. Bosworth, Ryan & Cameron, Trudy Ann & DeShazo, J.R., 2009. "Demand for environmental policies to improve health: Evaluating community-level policy scenarios," Journal of Environmental Economics and Management, Elsevier, vol. 57(3), pages 293-308, May.
    5. Isabell Goldberg & Jutta Roosen, 2007. "Scope insensitivity in health risk reduction studies: A comparison of choice experiments and the contingent valuation method for valuing safer food," Journal of Risk and Uncertainty, Springer, vol. 34(2), pages 123-144, April.
    6. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    7. Gregory Ponthiere, 2016. "The contribution of improved joint survival conditions to living standards: an equivalent consumption approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(2), pages 407-449, February.
    8. Liam Delaney & Francis O’Toole, 2006. "Willingness to pay: individual or household?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 30(4), pages 305-309, December.

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    More about this item

    Keywords

    Value of statistical life; household bargaining; intertemporal allocation models; optimal life insurance;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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