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Economics Research International
Volume 2011 (2011), Article ID 191425, 5 pages
http://dx.doi.org/10.1155/2011/191425
Research Article

Discount Rate for Health Benefits and the Value of Life in India

Madras School of Economics, Chennai 600 025, India

Received 7 December 2010; Revised 10 July 2011; Accepted 1 August 2011

Academic Editor: Paresh Kumar Narayan

Copyright © 2011 K. R. Shanmugam. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study contributes to the literature by estimating discount rate for health benefits and value of statistical life of workers in India. The discount rate is imputed from wage-risk trade-offs in which workers decide whether to accept a risky job with higher wages. The estimated real discount rate varies across regions ranging 2.4–5.1 percent, which is closer to the financial market rate for the study period. The estimated value of a statistical life is Rs. 20 (US $ 1.107) million. The results thus provide no empirical support for utilizing a separate rate of discount for health benefits of life-saving policies in developing countries like India.