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On the value of time and human life

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  • François Gardes

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, EGEI - Éthique et Gouvernance de l’Entreprise et des Institutions - UCO - Université Catholique de l'Ouest)

Abstract

The opportunity cost of time is estimated using a model based on domestic production (depending on monetary and time expenditures) and direct utility (depending on produced commodities). These factors of domestic production are measured by the matching of a Family Budget survey with a Time Use survey. The new model is estimated on Canadian, French, Polish, US and Burkina-Faso statistics. It allows the economic value of human life to be estimated, based on the integration of the marginal value of each instant during an individual's life cycle. This value is shown to give a different pattern across countries compared to their per capita GDP. Finally, the opportunity cost of time is shown to vary between commodities according to the possibility of substituting money and time in domestic production. It also increases between countries relatively to the average wage rate, according to the degree of liberalization of the labor markets.

Suggested Citation

  • François Gardes, 2021. "On the value of time and human life," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-03325332, HAL.
    • Handle: RePEc:hal:cesptp:halshs-03325332
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03325332
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    References listed on IDEAS

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    1. Carla Canelas & François Gardes & Philip Merrigan & Silvia Salazar, 2019. "Are time and money equally substitutable for all commodity groups in the household’s domestic production?," Review of Economics of the Household, Springer, vol. 17(1), pages 267-285, March.
    2. Anil Alpman, 2016. "Implementing Rubin's alternative multiple-imputation method for statistical matching in Stata," Stata Journal, StataCorp LP, vol. 16(3), pages 717-739, September.
    3. François Gardes & Christophe Starzec, 2018. "A Restatement of Equivalence Scales Using Time and Monetary Expenditures Combined with Individual Prices," PSE-Ecole d'économie de Paris (Postprint) hal-01478056, HAL.
    4. Mishan, E J, 1971. "Evaluation of Life and Limb: A Theoretical Approach," Journal of Political Economy, University of Chicago Press, vol. 79(4), pages 687-705, July-Aug..
    5. François Gardes, 2019. "The Estimation of Price Elasticities and the Value of Time in a Domestic Production Framework: an Application using French Micro-Data," PSE-Ecole d'économie de Paris (Postprint) hal-03281830, HAL.
    6. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1912-1946, December.
    7. François Gardes & Christophe Starzec, 2018. "A Restatement of Equivalence Scales Using Time and Monetary Expenditures Combined with Individual Prices," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01478056, HAL.
    8. Mark Aguiar & Erik Hurst, 2007. "Life-Cycle Prices and Production," American Economic Review, American Economic Association, vol. 97(5), pages 1533-1559, December.
    9. Mark Aguiar & Erik Hurst & Loukas Karabarbounis, 2013. "Time Use during the Great Recession," American Economic Review, American Economic Association, vol. 103(5), pages 1664-1696, August.
    10. François Gardes & Christophe Starzec, 2018. "A Restatement of Equivalence Scales Using Time and Monetary Expenditures Combined with Individual Prices," Post-Print hal-01478056, HAL.
    11. François Gardes, 2019. "The Estimation of Price Elasticities and the Value of Time in a Domestic Production Framework: an Application using French Micro-Data," Annals of Economics and Statistics, GENES, issue 135, pages 89-120.
    12. François Gardes & Christophe Starzec, 2018. "A Restatement of Equivalence Scales Using Time and Monetary Expenditures Combined with Individual Prices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(4), pages 961-979, December.
    13. François Gardes, 2019. "The Estimation of Price Elasticities and the Value of Time in a Domestic Production Framework: an Application using French Micro-Data," Post-Print hal-03281830, HAL.
    14. Rubin, Donald B, 1986. "Statistical Matching Using File Concatenation with Adjusted Weights and Multiple Imputations," Journal of Business & Economic Statistics, American Statistical Association, vol. 4(1), pages 87-94, January.
    15. François Gardes, 2019. "The Estimation of Price Elasticities and the Value of Time in a Domestic Production Framework: an Application using French Micro-Data," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03281830, HAL.
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    Keywords

    opportunity cost of time; value of human life; elasticity of substitution;
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