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The Cost of Life Expectancy and the Implicit Social Valuation of Life[Note 1. We wish to thank two anonymous referees for helpful ...]
Author(s) -
Dowrick Steve,
Dunlop Yvonne,
Quiggin John
Publication year - 1998
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00130
Subject(s) - life expectancy , economics , valuation (finance) , value of life , goods and services , consumption (sociology) , value (mathematics) , actuarial science , econometrics , microeconomics , sociology , economy , statistics , demography , finance , mathematics , population , social science
A new method of estimating the economic value of life is proposed. Using cross‐country data, an equation is estimated to explain life expectancy as a function of real consumption of goods and services. The associated cost function for life expectancy in terms of the prices of specific goods and services is used to estimate the cost of a reduction in age‐specific mortality rates sufficient to save the life of one person. The cost of saving a life in OECD countries is as much as 1000 times that in the poorest countries. Ethical implications are discussed.