2012), "Risk Aversion and the Value of Risk to Life

The standard literature on the value of life relies on the assumption that individ-uals are risk neutral with respect to mortality risk. In order to account for mortality risk aversion, we extend the theory to a simple variety of nonadditively separable preferences. The enlargement we propose is relevant for the evaluation of life-saving programs: current practice, we estimate, puts too little weight on mortality risk reduc-tion of the young. Our correction exceeds in magnitude that introduced by the switch from the notion of number of lives saved to the notion of years of life saved