Heterogeneity in the Value of Life / Joseph E. Aldy, Seamus J. Smyth.

Format:

Book

Author/Creator:

Aldy, Joseph E.

Contributor:

National Bureau of Economic Research.

Smyth, Seamus J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20206.

NBER working paper series no. w20206

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

We develop a numerical life-cycle model with choice over consumption and leisure, stochastic mortality and labor income processes, and calibrated to U.S. data to characterize willingness to pay (WTP) for mortality risk reduction. Our theoretical framework can explain many empirical findings in this literature, including an inverted-U life-cycle WTP and an order of magnitude difference in prime-aged adults WTP. By endogenizing leisure and employing multiple income measures, we reconcile the literature's large variation in estimated income elasticities. By accounting for gender- and race-specific stochastic mortality and income processes, we explain the literature's black-white and female-male differences.

Notes:

Print version record

June 2014.