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Norwegian

Individual and household value of mortality reductions with intrahousehold bargaining

Link to article:

[PDF]

Authors:

Strand, J.

Year:

2004

Reference:

HERO Skrifter
Number in series: 2

Summary

I derive alternative measures of maximum willingness to pay (WTP) and value of statistical life (VSL) related to changes in the supply of a public good affecting mortality for both members of two-person households, when members are selfish, live for at most two periods, and strike efficient Nash bargains over consumption of individual and household goods. I find no systematic bias in letting one household member conduct the (WTP or VSL) valuation on behalf of the household. Publicgood VSL may exceed private-good VSL due to each member attaching (purely selfish) preferences to the event that the other member survives or dies, and to a possible net income potential of the other member when surviving in period 2. When period 2 is a retirement period and household members’ incomes are then fixed, interview surveys tend to overvalue VSL due to ignored negative effects of own survival on government pension budgets.

Keywords:

Value of statistical life; household bargaining; intertemporal allocation models; optimal life insurance

Project:

Oppdragsgiver: Norges forskningsråd
Oppdragsgivers prosjektnr.:
Frisch prosjekt: 4101 - Economics of health

ISBN:

82-7756-134-2

Contact:

jon.strand@econ.uio.no

Financing:

Norges forskningsråd