Adler, Matthew, Ferranna, Maddalena, Hammitt, James K. and Treick, Nicolas (2021) Fair innings? The utilitarian and prioritarian value of risk reduction over a whole lifetime. Journal of Health Economics, vol. 75. pp. 1-59.

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Identification Number : 10.1016/j.jhealeco.2020.102412


The social value of risk reduction (SVRR) is the marginal social value of reducing an individual’s fatality risk, as measured by some social welfare function (SWF). This Article
investigates SVRR, using a lifetime utility model in which individuals are differentiated by age, lifetime income profile, and lifetime risk profile. We consider both the utilitarian SWF and a “prioritarian” SWF, which applies a strictly increasing and strictly concave transformation to
individual utility. We show that the prioritarian SVRR provides a rigorous basis in economic theory for the
“fair innings” concept, proposed in the public health literature: as between an older individual and a similarly situated younger individual (one with the same income and risk profile), a risk reduction for the younger individual is accorded greater social weight even if the gains to
expected lifetime utility are equal. The comparative statics of prioritarian and utilitarian SVRRs with respect to age, and to (past, present, and future) income and baseline survival probability, are significantly different from the conventional value per statistical life (VSL). Our empirical
simulation based upon the U.S. population survival curve and income distribution shows that prioritarian SVRRs with a moderate degree of concavity in the transformation function conform to widely held views regarding lifesaving policies: the young should take priority but income should make no difference.

Item Type: Article
Language: English
Date: January 2021
Refereed: Yes
Place of Publication: Amsterdam.
Uncontrolled Keywords: Social welfare function (SWF), Benefit-cost analysis (BCA), Value of statistical life (VSL), Fair innings, Social value of risk reduction (SVRR), Utilitarian, Prioritarian, Risk regulation
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 08 Dec 2020 15:30
Last Modified: 17 Dec 2021 09:08
OAI Identifier:
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