LIVING LONGER AND HEALTHIER
December 20, 2005
Over the past century, medical advances have extended life spans and improved the quality of life. A new paper from the National Bureau of Economic Research quantifies the benefits economically.
The authors find that:
- The reduction in mortality from 1970 to 2000 had an economic value of about $3.2 trillion per year.
- Over the longer term, the cumulative longevity gains during the twentieth century were worth about $1.3 million per person.
They also note that improvements in health tend to be complementary:
- Improvements in life expectancy from any source raise willingness to pay for further health improvements by increasing the value of remaining life.
- This means that advances against one disease, like heart disease, raise the value of progress against other age-related ailments, such as cancer.
- The authors find that reductions in mortality since 1970 have raised the value of further health progress by about 18 percent.
The authors also suggest that current funding of medical research is too low. A single percent reduction in mortality from cancer or heart disease would be worth nearly $500 billion to current and future Americans. However, the United States only invests $50 billion annually in medical research.
Source: Les Picker, "The Value of Health and Longevity," NBER Digest, December 2005; based upon: Kevin Murphy and Robert Topel, "The Value of Health and Longevity," National Bureau of Economic Research, Working Paper No. 11405, June 2005.
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