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Are some lives more valuable? An ethical preferences approach
Olof Johansson-Stenman1, Peter Martinsson
1Department of Economics, Göteborg University, Box 640, SE 405 30 Göteborg, Sweden. olof.johansson@economics.gu.se
Abstract:
We develop a theoretical model of the ethical preferences of individuals, combining individual social welfare functions and random utility theory. The model is applied by conducting a choice experiment regarding safety-enhancing road investments that target different age groups and road user types. The relative value of a saved life is found to decrease with age, such that the present value of a saved life-year is almost independent of age at a pure rate of time preference of a few percent. Moreover, a saved pedestrian is consistently valued higher than a saved car driver of the same age.
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