Volume 28, Number 3 (Summer) 1993
Evans, William N., and W. Kip Viscusi. 1993. "Income Effects and the Value of Health." Journal of Human Resources 28(3):497-518.
Although valuations of risk should increase with income, hedonic wage studies have not been well suited to assessing this relationship. Using survey data on consumer valuations of product safety, this paper analyzes the role of income effects for several utility functions. The methodology developed in this paper assesses the effect of income on the certainty equivalent value of the health effect (income elasticities range from 0.18 to 0.39) and on the risk-money tradeoff for small changes in risk (income elasticities range from 0.17 to 0.38). Health status is a normal economic good.
William N. Evans is an assistant professor of economics at the University of Maryland; W. Kip Viscusi is a professor of economics at Dale University. The authors wish to thank three anonymous referees for a number of helpful suggestions. Data requests should be sent from December 1993 through December 1996 to W. Kip Viscusi, Department of Economics, Duke University, Durham, NC, 27706.
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