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Rate of time preference and the quantity adjusted value of life in India

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  • SHANMUGAM, K. R.

Abstract

The choice of appropriate discount rate for comparing the long-term health benefits of policies is a complex issue. This study contributes to this sparsely researched issue from the perspective of developing countries by estimating the implicit discount rate that workers reveal through their willingness to incur death risks on-the-job and quantity-adjusted value of life of workers using an original data set from the Indian labor market. The estimated real discount rate ranges from 7.6 to 9.7 per cent, which is closer to the financial market rate for the study period and consistent with earlier studies from developed nations. The estimated value of life ranges are Rs. 24.3–26.5 (US $1.34–1.47) million. The results of the study can aid policy makers, international agencies, and researchers in evaluating health projects in India and other developing nations.

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  • Shanmugam, K. R., 2006. "Rate of time preference and the quantity adjusted value of life in India," Environment and Development Economics, Cambridge University Press, vol. 11(5), pages 569-583, October.
    • Handle: RePEc:cup:endeec:v:11:y:2006:i:05:p:569-583_00
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    Cited by:

    1. Jichun Zhao & Hongbiao Wang & Jianxin Guo, 2021. "Smog Avoidance Investment While Improving Air Quality: Health Demand or Risk Aversion? Evidence from Cities in China," IJERPH, MDPI, vol. 18(15), pages 1-21, July.
    2. Amarendra Sahoo & Thijs ten Raa, 2021. "Wage-Productivity Differentials and Indian Economic Efficiency," World Scientific Book Chapters, in: Efficiency and Input-Output Analyses Theory and Applications, chapter 15, pages 243-269, World Scientific Publishing Co. Pte. Ltd..
    3. Lydia Lawless & Andreas Drichoutis & Rodolfo Nayga, 2013. "Time preferences and health behaviour: a review," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 1(1), pages 1-19, December.
    4. Paul Hallwood, 2018. "The Confederacy and the American Civil War, 1861-1865: Greed Or Grievance?," Working papers 2018-18, University of Connecticut, Department of Economics.
    5. Ajitava Raychaudhuri & Poulomi Roy, 2021. "The Optimal Distribution Rule of Federal Funds to States in India: A Suggested Methodology," South Asian Journal of Macroeconomics and Public Finance, , vol. 10(2), pages 193-225, December.
    6. Sahoo, A., 2008. "Essays on the Indian economy : Competitive pressure, productivity and performance," Other publications TiSEM 374e9035-815c-43fe-a68e-e, Tilburg University, School of Economics and Management.
    7. Agamoni Majumder & S. Madheswaran, 2022. "Discounting Long-Term Job-Related Health Risks in the Context of Indian Workers," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(4), pages 1099-1120, December.
    8. Paul Hallwood, 2011. "Civil War and Willingness to Pay for Independence: The American Revolution," Working papers 2011-15, University of Connecticut, Department of Economics.
    9. K. R. Shanmugam, 2011. "Discount Rate for Health Benefits and the Value of Life in India," Working Papers id:4524, eSocialSciences.

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