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Value of Life

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This RePEc Biblio topic is edited by Yong Yin. It was first published on 2013-08-03 10:53:10 and last updated on 2013-08-03 15:53:10.

Introduction by the editor

Note: This is an ongoing attempt. Please let me know if you have any suggestions. The basic idea of value of life started with a simple notion of human being as a storage of future labor income streams. So the value of life can be calculated simply as total sum of (discounted) future wage income. Shepard and Zeckhauser (1984) used a life cycle model to first study the trade off between health risk and consumption. Rosen (1988) utilized the idea of self-protection studied in Ehrlich and Becker (1972) to first link the value of life with willingness to pay in reduction in potential (health) risks. The idea got extended along two dimensions in empiric studies: stated preference in contingency claims and revealed preference via trade-off involving mortality/mobility differentials. The latter approach usually involves statistical methods (typically regression analysis), which leads to the concept of statistical value of life. Since Rosen (1988)'s seminal work, there is little theoretical advance for this topic. (I cannot find Per-Olov Johansson's RePec handler.) While Rosen's idea was built on "exogenous" mortality reduction, Ehrlich (2000) did introduce self-protection in an "endogenous" mortality reduction framework. But he was only able to derive closed-form solutions for value of life saving under simplified assumptions. Later, Ehrlich and Yin (2005) used numerical simulation to relax some of the assumptions in Ehrlich (2000). But they failed to relax all assumptions due to complexity of stochastic optimization problem. On the empirical part, Kip Viscusi has two excellent survey articles. His 1993 article of JEL provided a comprehensive survey of up-to-date empirical work on the concept of value of life saving. Viscusi and Aldy (2003) provided an update. (Viscusi, 2010, provided an introduction and overview on a special issue of JRU.) Hall and Jones (2007) tried to access the value of life from a macro point of view in terms of economic devel

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  1. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-648, July-Aug..
  2. Rosen, Sherwin, 1988. "The Value of Changes in Life Expectancy," Journal of Risk and Uncertainty, Springer, vol. 1(3), pages 285-304, September.
  3. Ehrlich, Isaac, 2000. "Uncertain lifetime, life protection, and the value of life saving," Journal of Health Economics, Elsevier, vol. 19(3), pages 341-367, May.
  4. Isaac Ehrlich & Yong Yin, 2005. "Explaining Diversities in Age-Specific Life Expectancies and Values of Life Saving: A Numerical Analysis," Journal of Risk and Uncertainty, Springer, vol. 31(2), pages 129-162, September.
  5. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1912-1946, December.
  6. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
  7. Donald S. Shepard & Richard J. Zeckhauser, 1984. "Survival versus Consumption," Management Science, INFORMS, vol. 30(4), pages 423-439, April.
  8. W. Kip Viscusi, 2012. "What'S To Know? Puzzles In The Literature On The Value Of Statistical Life," Journal of Economic Surveys, Wiley Blackwell, vol. 26(5), pages 763-768, December.
  9. W. Viscusi, 2010. "The heterogeneity of the value of statistical life: Introduction and overview," Journal of Risk and Uncertainty, Springer, vol. 40(1), pages 1-13, February.
  10. Robert E. Hall & Charles I. Jones, 2007. "The Value of Life and the Rise in Health Spending," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 39-72.
  11. Charles I. Jones, 2011. "Life and Growth," NBER Working Papers 17094, National Bureau of Economic Research, Inc.