QUALITY-OF-LIFE AND THE WTP FOR AN INCREASED LIFE EXPECTANCY AT AN ADVANCED AGE

In this study we report an attempt to measure the value adult Swedes i mpute to an increased survival probability at high ages. A rating scal e between the worst possible quality of life (=1) and the best possibl e quality of life (=10) is used to indicate the quality of life a pers on expects to achieve at an advanced age. We find a highly significant correlation between this quality measure and the insurance premium a person is willing to pay in exchange for a programme increasing the ex pected length of life by one year, conditional on having survived unti l the age of 75 years. The (maximum) insurance premium the average per son is willing to pay for such a programme is less than $1500. The wil lingness to pay increase with a person's age, but at a low rate. The i mplied average marginal rate of time preference is about 1 percent. (C ) 1997 Elsevier Science S.A.