The annual impact of seasonal influenza in the US: Measuring disease burden and costs

A substantial literature over the past thirty years has evaluated tradeoffs between money and fatality risks. These values in turn serve as estimates of the value of a statistical life. This article reviews more than 60 studies of mortality risk premiums from ten countries and approximately 40 studies that present estimates of injury risk premiums. This critical review examines a variety of econometric issues, the role of unionization in risk premiums, and the effects of age on the value of a statistical life. Our meta-analysis indicates an income elasticity of the value of a statistical life from about 0.5 to 0.6. The paper also presents a detailed discussion of policy applications of these value of a statistical life estimates and related issues, including risk-risk analysis.

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The value of a statistical life: A critical review of market estimates throughout the world

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The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World

When costs and benefits are weighed together, technological advances have proved to be worth far more than their costs. by David M. Cutler and Mark McClellan ABSTRACT: Medical technology is valuable if the benefits of medical advances exceed the costs. We analyze technological change in five conditions to deter- mine if this is so. In four of the conditions—heart attacks, low-birthweight infants, depression, and cataracts—the estimated benefit of technological change is much greater than the cost. In the fifth condition, breast cancer, costs and benefits are about of equal magnitude. We conclude that medical spending as a whole is worth the increased cost of care. This has many implications for public policy. I t is widely accepted that technological change has ac- counted for the bulk of medical care cost increases over time. But it does not necessarily follow that technological change is there- fore bad. Presumably, technological change brings benefits in addi- tion to costs—increased longevity, improved quality of life, less time absent from work, and so on. These benefits need to be compared with the costs of technology before welfare statements can be made. Technological change is bad only if the cost increases are greater than the benefits. In aggregate, health has improved as medical spending has in- creased. Given then prevailing medical spending by age, the average newborn in 1950 could expect to spend $8,000 in present value on medical care over his or her lifetime. The comparable amount in 1990 is $45,000. An infant born in 1990 had a life expectancy that was seven years greater than that of the one born in 1950, and lower lifetime disability as well. 1 But how much of the health improvement is a result of medical care? Is the medical component worth it? These questions capture perhaps the most critical issue in the economic

https://scholar.harvard.edu/files/cutler/files/is_technological_change_in_medicine_worth_it.pdf

Is Technological Change In Medicine Worth It

This paper makes two contributions to the modeling of addiction. First, we provide new and convincing evidence that smokers are forward-looking in their smoking decisions, using state excise tax increases that have been legislatively enacted but are not yet effective, and monthly data on consumption. Second, we recognize the strong evidence that preferences with respect to smoking are time inconsistent, with individuals both not recognizing the true dife culty of quitting and searching for self-control devices to help them quit. We develop a new model of addictive behavior that takes as its starting point the standard “ rational addiction” model, but incorporates time-inconsistent preferences. This model also exhibits forward-looking behavior, but it has strikingly different normative implications; in this case optimal government policy should depend not only on the externalities that smokers impose on others but also on the “ internalities” imposed by smokers on themselves. We estimate that the optimal tax per pack of cigarettes should be at least one dollar higher under our formulation than in the rational addiction case.

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W K Viscusi

Papers

The value of risks to life and health