ABSTRACT
Using a random sample of individuals in rural Bangladesh, this paper investigates people's ethical preferences regarding relative values of lives when it comes to saving lives of individuals of different ages. By assuming that an individual has preferences concerning different states of the world, and that these preferences can be described by an individual social welfare function, the individuals' preferences for life-saving programs are elicited using a pair-wise choice experiment involving different life-saving programs. In the analyses, we calculate the social marginal rates of substitution between saved lives of people of different ages. We also test whether people have preferences for saving more life-years rather than only saving lives. In particular, we test and compare the two hypotheses that only lives matter and that only life-years matter. The results indicate that the value of a saved life decreases rapidly with age and that people have strong preferences for saving life-years rather than lives per se. Overall, the results clearly show the importance of the number of life-years saved in the valuation of life.
Subject(s)
Choice Behavior/ethics , Rural Population , Value of Life , Adult , Age Factors , Aged , Aged, 80 and over , Bangladesh , Humans , Male , Middle Aged , Models, Statistical , Social Values , Young AdultABSTRACT
We develop a theoretical model of the ethical preferences of individuals, combining individual social welfare functions and random utility theory. The model is applied by conducting a choice experiment regarding safety-enhancing road investments that target different age groups and road user types. The relative value of a saved life is found to decrease with age, such that the present value of a saved life-year is almost independent of age at a pure rate of time preference of a few percent. Moreover, a saved pedestrian is consistently valued higher than a saved car driver of the same age.
Subject(s)
Models, Theoretical , Value of Life , Age Factors , Altruism , Choice Behavior , Humans , Safety/economics , Transportation/economicsABSTRACT
Empirical evidence suggests that people's risk-perceptions are often systematically biased. This paper develops a simple framework to analyse public policy when this is the case. Expected utility (well-being) is shown to depend on both objective and perceived risks (beliefs). The latter are important because of the fear associated with the risk and as a basis for corrective taxation and second-best adjustments. Optimality rules for public provision of risk-reducing investments, "internality-correcting" taxation (e.g. fat taxes) and provision of costly information to reduce people's risk-perception bias are presented.
Subject(s)
Encephalopathy, Bovine Spongiform , Policy Making , Public Opinion , Public Policy , Terrorism , Animals , Cattle , Food Supply , Humans , Models, Statistical , Models, Theoretical , Risk AssessmentABSTRACT
The health risk of smoking is valued using the contingent valuation method, applied to a Swedish sample of smokers. The respondents were asked to put a value on newly developed cigarettes with no associated health risks. The average additional willingness to pay for the new cigarettes is estimated to be between 10 and 41 SEK per pack, where the variation is due to statistical method, discounting, and whether the open-ended or closed-ended question format is used. Using medical data on life shortening effects of smoking, the results indicate rather low values put on a lost life-year, compared to most existing estimates based on other methods. This may indicate that smokers do underestimate the health risk of smoking. There is also initial optimism-bias regarding people's own ability to quit smoking at will. However, there are remaining methodological questions and we found little or no sensitivity to scope.
