ABSTRACT
How should a society compare the merits of decreasing mortality risks to individuals who differ in age or other characteristics? Two alternative methods for economic evaluation are reviewed: benefit-cost analysis based on value-per-statistical-life (VSL) measures, and social welfare function (SWF) analysis based on either utilitarian or prioritarian objectives. The sensitivity of VSL to age is ambiguous because VSL depends on both remaining life expectancy and the opportunity cost of spending, and also on other individual characteristics that are correlated with age (e.g., wealth). The sensitivity of the utilitarian evaluation to age is also ambiguous because it depends on future risks and consumption. Compared with utilitarianism, prioritarian SWFs attach greater weight to policies that benefit the young who are among the worst-off in the population (from a lifetime perspective). As a result, the prioritarian framework provides a rigorous basis in economic theory for the “fair innings” concept popular in the public health literature. The analysis is useful when evaluating mortality risk regulation, the allocation of healthcare resources, or the relative values of alternative interventions with health impacts.
