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Individual and household value of mortality reductions with intrahousehold bargaining

  • Strand, Jon

    ()

    (Department of Economics)

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.

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File URL: http://www.hero.uio.no/publicat/2004/HERO2004_2.pdf
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Paper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2004:2.

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Length: 32 pages
Date of creation: 14 Jun 2009
Date of revision:
Handle: RePEc:hhs:oslohe:2004_002
Contact details of provider: Postal:
HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway

Phone: 2307 5309
Fax: 2307 5310
Web page: http://www.hero.uio.no/eng.html
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  1. Kniesner Thomas J & Viscusi W. Kip & Ziliak James P, 2006. "Life-Cycle Consumption and the Age-Adjusted Value of Life," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-36, January.
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  6. Strand, Jon, 2003. "Public-good valuation and intrafamily allocation," Memorandum 28/2002, Oslo University, Department of Economics.
  7. Shelly Lundberg & Jennifer Ward-Batts, 2000. "Saving for Retirement: Household Bargaining and Household Net Worth," Discussion Papers in Economics at the University of Washington 0026, Department of Economics at the University of Washington.
  8. Johansson, Per-Olov, 1994. "Altruism and the value of statistical life: Empirical implications," Journal of Health Economics, Elsevier, vol. 13(1), pages 111-118, March.
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  11. Ted Bergstrom, 1994. "A Survey of Theories of the Family," Labor and Demography 9401001, EconWPA, revised 10 Oct 1994.
  12. Chen, Zhiqi & Woolley, Frances, 2001. "A Cournot-Nash Model of Family Decision Making," Economic Journal, Royal Economic Society, vol. 111(474), pages 722-48, October.
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  20. repec:reg:rpubli:282 is not listed on IDEAS
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  24. Strand, Jon, 2009. "Public- and private-good values of statistical lives Results from a combined choice-experiment and contingent-valuation survey," HERO On line Working Paper Series 2002:2, Oslo University, Health Economics Research Programme.
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