Living Large or Long? Preference Estimates from Completed-Life Stories

Health Economics seminar
People in circle laughing closely to each other

We estimate the marginal rate of substitution between longevity and lifetime income, a parameter that has relevance to policy questions in health care, climate policy, safety-regulation, innovation and tax-policy. 

Speaker
Amitabh Chandra
Date
Tuesday 19 Nov 2024, 12:00 - 13:00
Type
Seminar
Room
T3-35
Space
Mandeville Building
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We ask online respondents to choose between vignettes that describe completed life-stories, where  longevity, income, and a variety of other aspects of lives are randomised, and find that the typical respondent is willing to tradeoff about 7% of average annual income to live 1% longer. 

In contrast to conventional value-of-statistical-life estimates, which are constrained to have the same substitution elasticities by age and income, we demonstrate meaningful heterogeneity in the MRS across respondents. 

We demonstrate that elicitation of the MRS from completed lives has several desirable properties, including being correlated with respondents stated attitudes about income and health, and not being sensitive to respondents misunderstanding low-probability events. 

See also

The Labour and Health Economics of Breast Cancer

Alexander Ahammer (Johannes Kepler University Linz)
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