Discounting statistical lives

Benefit-cost analysis of government projects that reduce health risks over an extended period of time requires an estimate of the value of a future life. This in turn requires a discount rate. We suggest and carry out a method to estimate the discount rate using observations on discrete choices between projects with different time horizons. This method is implemented in a survey context. For our primary example, the estimated median discount rate is close to the market rate. A substantial proportion of the sample is estimated to have quite low discount rates. We provide some evidence that discount rates may differ for different types of risks.This research was supported in part by the U.S. Environmental Protection Agency under Cooperative Agreement in Environmental Economics Research CR-813557-01-0. The opinions expressed do not necessarily reflect the views of the U.S. Environmental Protection Agency. We would like to thank Paul Portney for bringing the importance of discounting statistical lives to our attention, and John Conlisk, Maureen Cropper, Mark Machina, Robert Mitchell, Peter Navarro, and Walter Oi for helpful comments.     

Evaluating Time Streams of Income: Discounting What?

For decisions whose consequences accrue over time, there are several possible techniques to compute total utility. One is to discount utilities of future consequences at some appropriate rate. The second is to discount per-period certainty equivalents. And the third is to compute net present values (NPVs) of various possible streams and to then apply the utility function to these net present values. We find that the best approach is to first compute NPVs of various possible income streams and then take the utility of such NPVs. We show the drawbacks of other alternative models of evaluating income streams. The article discusses the advantages of the power and logarithmic forms in the modeling of time preference. These are the only forms for which utility of income and utility of consumption are strategically equivalent. Further, these forms permit the flexibility in the choice of a time period (e.g., monthly or quarterly) without modifying the utility function, thus simplifying analysis.     

Measuring Intergenerational Time Preference: Are Future Lives Valued Less?

Prior research has estimated intergenerational time preferences by asking respondents to choose between hypothetical life saving programs. From such choices, researchers have concluded that the public heavily discounts the lives of people in future generations. However, using a multiversion survey involving 401 respondents, I show that imputed intergenerational time preferences can be dramatically affected by the specific question that is asked. Different elicitation procedures can yield widely varying results by evoking or suppressing various relevant considerations (such as uncertainty). Many formats revealed no preference for current generations over future generations.     

从全球文化融合看中华文化的主体自觉

全球文化融合的时代语境使文化的主体自觉问题日益凸显。20世纪中国文化发展的经验教训告诉我们,不可偏离人类文化普遍价值提倡中国文化的特色、风格与气派。中华文化应基于全球化的历史背景,在清醒的文化反思的基础上,通过与西方进行对话交流的方式为人类提供具有普遍意义的价值资源,使自身成为人类普遍文化价值中的重要元素。     

Reassessing the Testing of Generic Utility Models for Mixed Gambles

Miyamoto's generic utility theory (GUT) is a bilinear form that captures a diverse set of utility formulations. The present study, using mixed gambles, experimentally evaluates GUT in a fashion similar to the Chechile and Cooke and the Chechile and Butler studies, but employs a novel method of analysis. The reasons for the new method is to solve a fundamental flaw with the regression approacch used in the earlier experiments and to solve a problem of model overfit. Several participants from the earlier Chechile and Butler experiment are now recognized as being consistent with the GUT representation, but many are not. A new experiment, with actual economic consequences for the participants, does not support GUT. Suggestions are provided for subsequent research studies assessing the GUT class of models.     

The Role of Social Contact in the Experience of Discrimination: Implications for Subjective Health Among Marriage Migrant Women in South Korea

Several studies have found that various social contexts could serve a protective role for minorities facing discrimination. One of these contexts is frequency of social contact, which is known to be positively associated with health outcomes. The purpose of this study was to examine the frequency of social contact with various social groups as a protective factor against the negative association between perceived discrimination and subjective health. Using data from the 2009 Korean National Survey of Multicultural Families, a total of 27,083 marriage migrant women were analyzed via hierarchical multiple regression. After controlling for socio‐demographic factors and Korean proficiency, the experience of discrimination was found to be significantly associated with lower levels of subjective health (B = ?0.22; P < 0.001). More frequent meetings with one's family of origin (B = 0.02; P < 0.01) and in‐laws (B = 0.06; P < 0.001) were associated with higher levels of subjective health, while more frequent meetings with neighbors were negatively associated (B = ?0.02; P < 0.001). More frequent contact with one's family of origin (B = 0.03; P < 0.05), rather than with other groups, such as friends from their country of origin, in‐laws, and neighbors, seemed to reduce the negative influence of discrimination on subjective health.     

A Choice Experiment Approach to the Valuation of Mortality

This paper presents an integrated framework for evaluating the reduction of several types of mortality risk using a Choice Experiment (CE) approach, a type of stated preference technique. Using this approach, we can distinguish the marginal willingness to pay (MWTP) for the amount of risk reduction from the MWTP for the opportunity of risk reduction and therefore calculate the “Quantity-based” Value of a Statistical Life. The risks in our survey include mortality risks due to accident, cancer, and heart disease. The Quantity-based VSL is calculated to be 350 million JPY (in 2002 Japanese Yen, about 2.9 million US dollars). Furthermore, we analyzed the influence of subjective risk perception and population characteristics of the respondents on their MWTP. Estimated results suggest that it is unnecessary to adjust the VSL according to the differences in the type of risk if the VSL is calculated using an adequate approach. However, adjustments for the timing of risk reduction and population characteristics are found to be significant for the execution of benefit transfer.JEL Classification: I18, D81, J17     

To be,or not to be,that is the question: An empirical study of the WTP for an increased life expectancy at an advanced age

This study reports an attempt to measure the value of an increased survival probability at advanced ages. It turns out that the average willingness to pay for a program which would increase the expected length of life by one year, conditional on having survived to the age of 75 years, is lower than $1,500. The willingness to pay increases with a person's age, but at a low and seemingly constant rate (1–4 percent per year).