Health risk and the value of life

A-Tier
Journal: Journal of Public Economics
Year: 2025
Volume: 245
Issue: C

Authors (3)

Bauer, Daniel (not in RePEc) Lakdawalla, Darius (University of Southern Califor...) Reif, Julian (not in RePEc)

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We extend the conventional life-cycle framework for valuing health and longevity improvements to a stochastic setting with multiple health states and apply it to data on mortality, quality of life, labor earnings, and medical spending for adults with different comorbidities. We find that sick adults are willing to pay nearly twice as much per quality-adjusted life-year (QALY) to reduce mortality risk as healthy adults, and that reducing the risk of serious illness is valued similarly to reducing the risk of mild illness. Our results provide a rational explanation for why people oppose a single threshold value for rationing care and why they invest less in prevention than in treatment.

Technical Details

RePEc Handle
repec:eee:pubeco:v:245:y:2025:i:c:s0047272725000441
Journal Field
Public
Author Count
3
Added to Database
2026-01-25