Age, Time, and the Measurement of Mortality Benefits
Several analytical procedures can be used to place dollar values on the benefits of policies that reduce mortality. This report examines the sensitivity of such measures to age, time, and information effects. It derives benefits measures from a formal model of individual lifetime consumption decisions and applies them to several cases of policy interest. The author derives a number of policy recommendations from the research reported here: (1) base benefits assessments on full lifetable comparisons; (2) reexamine clinical and laboratory data in a way that permits economically meaningful risk assessment; (3) undertake ancillary studies of individual risk preference and time consistency; (4) avoid the use of human-capital or value-of-life measures whenever possible; and (5) take careful account of the timing and distribution of information when choosing policy options and measuring benefits.