research
The Value of Health and Longevity
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Abstract
We develop an economic framework for valuing improvements to health and life expectancy, based on individuals' willingness to pay. We then apply the framework to past and prospective reductions in mortality risks, both overall and for specific life-threatening diseases. We calculate (i) the social values of increased longevity for men and women over the 20th century; (ii) the social value of progress against various diseases after 1970; and (iii) the social value of potential future progress against various major categories of disease. The historical gains from increased longevity have been enormous. Over the 20th century, cumulative gains in life expectancy were worth over 1.2millionperpersonforbothmenandwomen.Between1970and2000increasedlongevityaddedabout3.2 trillion per year to national wealth, an uncounted value equal to about half of average annual GDP over the period. Reduced mortality from heart disease alone has increased the value of life by about 1.5trillionperyearsince1970.Thepotentialgainsfromfutureinnovationsinhealthcarearealsoextremelylarge.Evenamodest1percentreductionincancermortalitywouldbeworthnearly500 billion.