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On the Value of Changes in Life Expectancy: Blips Versus Parametric Changes

On the Value of Changes in Life Expectancy: Blips Versus Parametric Changes We estimate the value of a ‘blip’, i.e. an immediate small reduction, in the hazard rate for a random sample of Swedes. Since the risk reduction is age-independent (2 ‘extra saved lives’ out of 10,000 during the next year), we can examine how the value of a statistical life varies with age. We also show how blip data can be used to obtain a lower bound for the value of a permanent change in an individual's hazard rate. The value of a life exhibits an inverted-U shape with respect to age, peaking at the age of 40, and lies within the $3 to $7 million interval where most reasonable estimates are clustered according to Viscusi's (1992) survey. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Risk and Uncertainty Springer Journals

On the Value of Changes in Life Expectancy: Blips Versus Parametric Changes

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References (29)

Publisher
Springer Journals
Copyright
Copyright © 1997 by Kluwer Academic Publishers
Subject
Economics; Economic Theory/Quantitative Economics/Mathematical Methods; Microeconomics; Operation Research/Decision Theory; Environmental Economics
ISSN
0895-5646
eISSN
1573-0476
DOI
10.1023/A:1007705309543
Publisher site
See Article on Publisher Site

Abstract

We estimate the value of a ‘blip’, i.e. an immediate small reduction, in the hazard rate for a random sample of Swedes. Since the risk reduction is age-independent (2 ‘extra saved lives’ out of 10,000 during the next year), we can examine how the value of a statistical life varies with age. We also show how blip data can be used to obtain a lower bound for the value of a permanent change in an individual's hazard rate. The value of a life exhibits an inverted-U shape with respect to age, peaking at the age of 40, and lies within the $3 to $7 million interval where most reasonable estimates are clustered according to Viscusi's (1992) survey.

Journal

Journal of Risk and UncertaintySpringer Journals

Published: Oct 25, 2004

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