The Cost of Life Expectancy and the Implicit Social Valuation of Life.

A new method of estimating the economic value of life is proposed. Using cross-country data, an equation is estimated to explain life expectancy as a function of real consumption of goods and services. The associated cost function for life expectancy in terms of the prices of specific goods and services is used to estimate the cost of a reduction in age-specific mortality rates sufficient to save the life of one person. The cost of saving a life in OECD countries is as much as 1,000 times that in the poorest countries. Ethical implications are discussed. Copyright 1998 by The editors of the Scandinavian Journal of Economics.