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Valuing Pain using the Subjective Well-being Method

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  • Thorhildur Ólafsdóttir
  • Tinna Laufey Ásgeirsdóttir
  • Edward C. Norton

Abstract

Chronic pain clearly lowers utility, but it is empirically challenging to estimate the monetary compensation needed to offset this utility reduction. We use the subjective well-being method to estimate the value of pain relief among individuals age 50 and older. We use a sample of 64,205 observations from 4 waves (2008-2014) of the Health and Retirement Study, a nationally representative individual-level survey data, permitting us to control for individual heterogeneity. Our models, which allow for nonlinear effects in income, show the value of avoiding pain ranging between 56 to 145 USD per day. These results are lower than previously reported, suggesting that the value of pain relief varies by income levels. Thus, previous estimates of the value of pain relief assuming constant monetary compensation for pain across income levels are heavily affected by the highest income level. Furthermore, we find that the value of pain relief increases with pain severity.

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  • Thorhildur Ólafsdóttir & Tinna Laufey Ásgeirsdóttir & Edward C. Norton, 2017. "Valuing Pain using the Subjective Well-being Method," NBER Working Papers 23649, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:23649
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    2. Andrén, Daniela & Johansson Tapper, Erik, 2020. "Traffic accident experience and subjective well-being," Working Papers 2022:9, Örebro University, School of Business.
    3. Tinna Laufey Ásgeirsdóttir & Arnar Buason & Ásthildur Margrét Jóhannsdóttir, 2023. "Valuing the Wellbeing Associated with Psychosocial Factors at Work," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(4), pages 1737-1759, August.
    4. Strulik, Holger, 2021. "From pain patient to junkie: An economic theory of painkiller consumption and its impact on wellbeing and longevity," Journal of Health Economics, Elsevier, vol. 76(C).
    5. Kristjana Baldursdottir & Paul McNamee & Edward C. Norton & Tinna Laufey Asgeirsdottir, 2023. "Life satisfaction and body mass index: estimating the monetary value of achieving optimal body weight," Review of Economics of the Household, Springer, vol. 21(4), pages 1215-1246, December.
    6. Stöckel, Jannis & van Exel, Job & Brouwer, Werner B.F., 2023. "Adaptation in life satisfaction and self-assessed health to disability - Evidence from the UK," Social Science & Medicine, Elsevier, vol. 328(C).
    7. Rabbani, Maysam, 2023. "Mergers with future rivals can boost prices, bar entry, and intensify market concentration," International Journal of Industrial Organization, Elsevier, vol. 88(C).
    8. Macchia, Lucía & Oswald, Andrew J., 2021. "Physical pain, gender, and the state of the economy in 146 nations," Social Science & Medicine, Elsevier, vol. 287(C).
    9. Ólafsdóttir, Thorhildur & Ásgeirsdóttir, Tinna Laufey & Norton, Edward C., 2020. "Valuing pain using the subjective well-being method," Economics & Human Biology, Elsevier, vol. 37(C).
    10. Ásgeirsdóttir, Tinna Laufey & Hardardottir, Hjördis & Jonbjarnardóttir, Brynja, 2023. "Putting a price on pain: The monetary compensation needed to offset welfare losses due to violence," Social Science & Medicine, Elsevier, vol. 336(C).
    11. Macchia, Lucía, 2022. "Pain trends and pain growth disparities, 2009–2021," Economics & Human Biology, Elsevier, vol. 47(C).
    12. Sebastian Himmler & Jannis Stöckel & Job van Exel & Werner Brouwer, 2020. "The Value of Health - Empirical Issues when Estimating the Monetary Value of a QALY Based on Well-Being," SOEPpapers on Multidisciplinary Panel Data Research 1101, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Patel, Pankaj C. & Tsionas, Mike G. & Oghazi, Pejvak, 2023. "Compensating income variation in health and subjective well-being for the self-employed," Journal of Business Research, Elsevier, vol. 160(C).
    14. Baldursdottir, Kristjana & Asgeirsdottir, Tinna Laufey & Olafsdottir, Thorhildur, 2023. "How sensitive is the compensating income variation to severity and adaptation?," Economics & Human Biology, Elsevier, vol. 49(C).
    15. Rabbani, Maysam, 2021. "Mergers with Future Rivals Can Boost Prices, Intensify Market Concentration, and Bar Entry," MPRA Paper 112864, University Library of Munich, Germany, revised 26 Apr 2022.

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    • I10 - Health, Education, and Welfare - - Health - - - General
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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