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Respecting equality in economic option appraisal: valuing the time of your life

Published online by Cambridge University Press:  31 August 2022

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Abstract

Even where willingness-to-pay as a measure of welfare impact is adjusted for diminishing marginal utility, welfare economics is shown to favour policies that add to the life expectancy or that enhance the quality of life of persons who are already better-off. I propose an alternative, Equal Respect methodology, under an axiomatic claim that at the point of decision the prospective life years of all individuals are of equal intrinsic social value. This justifies equal valuation of risk mitigation across all persons; similarly, all appraised impacts should be scaled to accord equal respect to difficult but no-less-valuable lives.

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Article
Creative Commons
Creative Common License - CCCreative Common License - BY
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
Copyright
© The Author(s), 2022. Published by Cambridge University Press
Figure 0

Table 1. Option appraisal of a policy to introduce state-funding and rationing-by-queue into the market for medical consultation. Appraisal of impact on Richard and Polly, both needing a weekly consultation, and willing to pay £30 or to wait 2 hours as required

Figure 1

Table 2. Welfare equivalence of adding £7 to income, and adding an hour to life-time

Figure 2

Table 3. Shift from £30 charge to 2-hour queue for short medical check-ups required weekly. Valuation of impact for a regular health consultation that is important enough to be obtained by both Richard and Polly on either payment system. Utility Function: U = t.ln(k.C); t = 1; k = 0.01