
Tomas J. Philipson and George Zanjani
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VSL well into the millions, however, are paradoxical in the sense that the value of life is
put far beyond the resources (e.g., the discounted present value of labor income) of the
median individual. Such a finding, however, is consistent with the notion of health stock
smoothing. As argued above, the willingness to pay for a mortality risk reduction in a
fatal disease from a small probability π
s
to zero (i.e., through some medical innovation)
could well exceed π
s
* Y. Further suggestive evidence of the willingness of individuals
to commit extreme resources to the preservation of health can be found in ...