Valuing Life Over the Life Cycle

Protecting society’s most vulnerable members and avoiding medical triage decisions arguments were often used to warrant the substantial COVID-19 reallocation of economic and health care resources, raising the arbitrage between the value of lives saved vs (i) the opportunity cost of resources and (ii) other present or future lives affected by intervention. This paper solves a life cycle (LC) model of consumption, leisure and health choices to characterize the value of life along the (i) person-specific (age, health, labour income, wealth, preferences) and (ii) mortality risk-specific (beneficial vs detrimental, temporary vs permanent changes) dimensions. The model reproduces observed household LC dynamics and yields plausible out-of-sample life values. It identifies symmetric WTP and WTA for one-shot beneficial vs detrimental changes in longevity and asymmetric ones for permanent changes. Ageing lowers both the value of and responsiveness to changes in longevity via falling resources and health and marginal continuation utility of living