Empirical bounds on the value of improved health
28 Pages Posted:
Date Written: January 21, 2025
Abstract
Policies aimed at improving health and longevity are often evaluated by monetizing their expected gains in
quality-adjusted life years (QALYs). The monetization is usually done by dividing an estimate of the value
per statistical life (VSL) by the QALYs the average individual is expected to still have ahead of them. We
employ data from an online survey taken by a representative sample of French adults to explore the validity
of this practice and derive empirical bounds on the willingness-to-pay (WTP) for a marginal improvement
in either health quality or longevity. Testing whether the empirical bounds on the WTP for improved health
and longevity are the same offers a novel test for the descriptive validity of the QALY model. Our empirical
results let us refute this practice routinely applied in health and environmental economics.
JEL Classification: D03, D10, D81, I18, Q18, Q51
Suggested Citation: Suggested Citation
Empirical bounds on the value of improved health
(January 21, 2025). Available at SSRN: https://ssrn.com/abstract=