The Value of Health and Longevity

Posted: 1 Nov 2006

See all articles by Kevin M. Murphy

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)

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Abstract

We develop a framework for valuing improvements in health and apply it to past and prospective reductions in mortality in the United States. We calculate social values of (i) increased longevity over the twentieth century, (ii) progress against various diseases after 1970, and (iii) potential future progress against major diseases. Cumulative gains in life expectancy after 1900 were worth over $1.2 million to the representative American in 2000, whereas post‐ 1970 gains added about $3.2 trillion per year to national wealth, equal to about half of GDP. Potential gains from future health improvements are also large; for example, a 1 percent reduction in cancer mortality would be worth $500 billion.

Suggested Citation

Murphy, Kevin M. and Topel, Robert H., The Value of Health and Longevity. Journal of Political Economy, Vol. 114, pp. 871-904, October 2006. Available at SSRN: https://ssrn.com/abstract=941159

Kevin M. Murphy

University of Chicago ( email )

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Robert H. Topel (Contact Author)

University of Chicago - Booth School of Business ( email )

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Chicago, IL 60637
United States
773-702-7524 (Phone)
773-702-2699 (Fax)

National Bureau of Economic Research (NBER)

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United States

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