Abstract

http://ssrn.com/abstract=742364
 
 

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The Value of Health and Longevity


Kevin M. Murphy


University of Chicago; National Bureau of Economic Research (NBER)

Robert H. Topel


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

June 2005

NBER Working Paper No. w11405

Abstract:     
We develop an economic framework for valuing improvements to health and life expectancy, based on individuals' willingness to pay. We then apply the framework to past and prospective reductions in mortality risks, both overall and for specific life-threatening diseases. We calculate (i) the social values of increased longevity for men and women over the 20th century; (ii) the social value of progress against various diseases after 1970; and (iii) the social value of potential future progress against various major categories of disease. The historical gains from increased longevity have been enormous. Over the 20th century, cumulative gains in life expectancy were worth over $1.2 million per person for both men and women. Between 1970 and 2000 increased longevity added about $3.2 trillion per year to national wealth, an uncounted value equal to about half of average annual GDP over the period. Reduced mortality from heart disease alone has increased the value of life by about $1.5 trillion per year since 1970. The potential gains from future innovations in health care are also extremely large. Even a modest 1 percent reduction in cancer mortality would be worth nearly $500 billion.

Number of Pages in PDF File: 61

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Date posted: July 6, 2005  

Suggested Citation

Murphy, Kevin M. and Topel, Robert H., The Value of Health and Longevity (June 2005). NBER Working Paper No. w11405. Available at SSRN: http://ssrn.com/abstract=742364

Contact Information

Kevin M. Murphy (Contact Author)
University of Chicago ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7280 (Phone)
773-702-2699 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Robert H. Topel
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7524 (Phone)
773-702-2699 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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