We develop a numerical life-cycle model with choice over consumption and leisure, stochastic mortality and labor income processes, and calibrated to U.S. data – to characterize willingness to pay (WTP) for mortality risk reduction. Our theoretical framework can explain many empirical findings in this literature, including an inverted-U life-cycle WTP and an order of magnitude difference in prime-aged adults WTP. By endogenizing leisure and employing multiple income measures, we reconcile the literature's large variation in estimated income elasticities. By accounting for gender- and race-specific stochastic mortality and income processes, we explain the literature's black-white and female-male differences.
Joseph E. Aldy
Working Paper — Jan 14, 2020
China’s Unconventional Nationwide CO₂ Emissions Trading System: The Wide-Ranging Impacts of an Implicit Output Subsidy
This paper assesses the overall costs and distributional impacts of China’s planned nationwide emissions trading system for CO2 emissions reductions, a system that will differ from cap and trade and become the largest CO2 trading system in the world.
On the Issues: Australia’s Wildfires, Financial Risks of Climate Change, and More
Connecting this week's environmental and energy news to RFF's economic research.
Press Release — Jan 6, 2020
The Clean Air Act: Successes and Challenges Since 1970
A new retrospective analysis highlights the Clean Air Act’s successes and challenges.