Demand for health risk reductions

Abstract

A choice model based on utility in a sequence of prospective future health states permits us to generalize the concept of the value of statistical life (VSL). Our representative national survey asks individuals to choose between costly risk-reducing programs and the status quo in randomized stated choice scenarios. Our model allows for separate marginal utilities for discounted net income and avoided illness years, post-illness years, and lost life-years. Our estimates permit calculation of overall willingness to pay to reduce risks for a wide variety of different prospective illness profiles. These can be benchmarked against the standard VSL as a special case.