Article

Journal of Risk and Uncertainty

, Volume 41, Issue 3, pp 195-218

How would you like your gain in life expectancy to be provided? An experimental approach

  • Jytte Seested NielsenAffiliated withInstitute of Public Health – Unit for Health Economics, University of Southern Denmark Email author 
  • , Susan ChiltonAffiliated withUniversity of Newcastle
  • , Michael Jones-LeeAffiliated withUniversity of Newcastle
  • , Hugh MetcalfAffiliated withUniversity of Newcastle

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Abstract

This paper reports the results of an empirical study investigating people’s preferences over three different types of perturbation to their survival function, each perturbation generating the same gain in life expectancy. Preferences over the three different perturbations were found to be distributed more or less evenly across the subject pool. Use of a novel experimental methodology generated economically consistent and intuitively plausible responses to (necessarily) hypothetical questions concerning improvements in life expectancy by first allowing respondents to gain experience while making similar choices in an incentivized setting involving financial risk. The results demonstrate the potential for economic experiments to contribute to the development of more robust methods for policy evaluation in domains where physical risk is an important factor.

Keywords

Value of statistical life Incentivised learning Distribution of life expectancy gains

JEL Classification

J17 D6