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The Economic Value of Changing Mortality Probabilities: A Decision-Theoretic Approach

Milton C. Weinstein; Donald S. Shepard; Joseph S. Pliskin

Harvard University Press

Properties of individual willingness to pay for changes in mortality probabilities are examined using a decision-theoretic model. There is no unique value per life saved. The willingness to pay for a mortality reduction depends not only on the amount of reduction but also on the initial probability level and on whether the valuation is ex ante (e.g., decisions regarding health insurance, preventive medicine, or environmental health) or ex post (e.g., acute medical care). Several inequalities relating the imputed willingness to pay in various paradigm decision contexts are derived from the model with the addition of few additional behavioral assumptions.

DOI

10.2307/1884546

Volume

94 (2)

Pages

373

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