Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 96: Are Some Lives More Valuable?

Olof Johansson-Stenman and Peter Martinsson ()
Additional contact information
Olof Johansson-Stenman: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Peter Martinsson: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG

Abstract: A theoretical model of the ethical preferences of individuals is tested by conducting a choice experiment on safety-enhancing road investments. The relative value of a saved life is found to decrease with age, such that the present value of a saved year of life is almost independent of age at a pure rate of time preference of a few percent, and a saved car driver is valued 17-31% lower than a pedestrian of the same age. Moreover, individuals’ ethical preferences seem to be fairly homogenous.

Keywords: Ethics; social preferences; individual social welfare function; relative value of life; random ethical model

JEL-codes: D63; I18; J17

19 pages, March 28, 2003

Note: Published in Journal of Health Economics, 2208, Vol. 27, pp. 739-752.

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