Preferences for life-expectancy gains: Sooner or later?

B-Tier
Journal: Journal of Risk and Uncertainty
Year: 2015
Volume: 51
Issue: 1
Pages: 79-101

Authors (2)

James Hammitt (Harvard University) Tuba Tunçel (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

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

Abstract

We assess individuals’ preferences for time paths of reductions in mortality risk yielding a life-expectancy gain of about 1 month. In a survey of more than 1000 French residents, we find substantial coherence and heterogeneity. We elicit pairwise preferences between three perturbations of age- and gender-specific survival curves: transient (reduce hazard for next 10 years), additive (reduce hazard in all future years by subtracting a constant), and proportional (reduce hazard in all future years by a common fraction). The preference order implied by these pairwise responses is transitive for 85% of respondents. The most common preference orders, accounting for more than half the respondents, are strict indifference, proportional ≻ additive ≻ transient, and the inverse of that ranking. These are consistent with globally risk-neutral, risk-seeking, and risk-averse preferences toward longevity, respectively. Choices between one of these scenarios and a latent version that provides no risk reduction for the first 10 or 20 years are consistent with these risk postures. The mean and median consumption-discount rates are 12 and 5% per year, respectively, and the average coefficient of relative risk aversion with respect to financial gambles is about 0.5. Preferences toward the time path of mortality-risk reduction are not strongly associated with individual characteristics, although respondents who are older or exhibit higher consumption-discount rates tend to exhibit less longevity-risk aversion. Copyright Springer Science+Business Media New York 2015

Technical Details

RePEc Handle
repec:kap:jrisku:v:51:y:2015:i:1:p:79-101
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25