Document Type
Article
Publication Title
Journal of Risk and Uncertainty
Publication Date
5-2019
ISSN
0895-5646
Page Number
143
Keywords
health dependent utility functions, medical expenses, health effects
Disciplines
Health Law and Policy | Law
Abstract
This article reviews economic evidence on health-dependent utility functions and presents new estimates of utility functions for cancer. Estimates of health-dependent utility functions have found that mild adverse health impacts can be treated as monetary equivalents. Severe health consequences also reduce utility levels but have an additional effect of altering the structure of utility functions by reducing the marginal utility of income. The implications of past studies are often misleading when they fail to account for income losses and medical expenses associated with serious ailments. This article’s estimates of the structure of utility functions for cancer indicate a substantially lower marginal utility of income at any given income level. This result is consistent with the welfare consequences of other severe health effects, which impose harms that are not tantamount to a monetary loss.
Recommended Citation
W. Kip Viscusi,
Utility Functions for Mild and Severe Health Risks, 58 Journal of Risk and Uncertainty. 143
(2019)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/1547