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The cost of uncertain life span

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  • Ryan Edwards

Abstract

Much uncertainty surrounds the length of human life. The standard deviation in adult life span is about 15 years in the USA, and theory and evidence suggest that it is costly. I calibrate a utility-theoretic model that shows that 1 year in standard deviation is worth about half a life year. Differences in variance exacerbate health inequalities between and among rich and poor countries. Accounting for the cost of life-span variance appears to amplify recently discovered patterns of convergence in world average human well-being because the component of variance due to infant mortality has exhibited even more convergence than life expectancy. Copyright Springer-Verlag 2013

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  • Ryan Edwards, 2013. "The cost of uncertain life span," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1485-1522, October.
    • Handle: RePEc:spr:jopoec:v:26:y:2013:i:4:p:1485-1522
    DOI: 10.1007/s00148-012-0405-0
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    More about this item

    Keywords

    Health inequality; Population health; Convergence; I10; J17; O11;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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