Heterogeneity in the Value of Life
Smyth, Seamus JNote: Order does not necessarily reflect citation order of authors.
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CitationAldy, Joseph Edgar 2014. Heterogeneity in the Value of Life. HKS Faculty Research Working Paper Series RWP14-024, John F. Kennedy School of Government, Harvard University.
AbstractWe 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.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:23017248
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