Risk Aversion and the Value of Life

Publicado en

  • Review of Economic Studies


  • We show that state non-separable preferences à la Epstein–Zin–Weil (EZW) provide a tractable and flexible framework to study the economics of health and longevity. This utility representation: (1) admits a preference for timing of resolution of uncertainty regarding mortality risks; (2) links the marginal valuation of survival to the level of survival; (3) can preserve homotheticity even for low degrees of intertemporal substitution without generating implausible predictions regarding the value of life; and (4) adds needed flexibility to account for the empirical evidence on the value of life. We illustrate the implications of EZW preferences for the economic value of observed differences in life expectancy across countries and over time, and for the value of life over the life cycle.

fecha de publicación

  • 2017

Líneas de investigación

  • AIDS
  • Epstein–Zin–Weil Preferences
  • Life Expectancy
  • Value of Statistical Life
  • Welfare

Página inicial

  • 1472

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