Valuing Statistical Life Using Seniors' Medical Spending
This working paper paper is the first study to develop revealed preference evidence on how much Americans over age 65 are willing to pay to reduce their own mortality risks.
Abstract
This study provides the first revealed preference evidence on the value of statistical life (VSL) for US seniors aged 67–97 from the rates at which they choose to consume medical care relative to other private goods and by the effects of their choices on their survival probabilities. These effects are estimated from individuals’ survey responses linked with their Medicare records. Instrumental variables estimators provide robust evidence that the mean VSL is below $1 million and that it decreases with age, and, given age, increases with income, education, and health and is higher for women and people who never smoked.
Authors
Jonathan Ketcham
Arizona State University
Nicolai Kuminoff
Arizona State University
Nirman Saha
University of Surrey
