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Individual and household value of mortality reductions with intrahousehold bargaining

Listed author(s):
  • 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
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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