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
Workshop/Seminar — Oct 30, 2019
2019 VALUABLES Consortium Annual Workshop
The VALUABLES Consortium's workshop is an annual gathering of economists, NASA experts, Earth scientists, decisionmakers, and thought leaders.
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