On the value of life and the value of progeny
Rostock Center - discussion paper 20
Rostock, Rostock Center for the Study of Demographic Change (2008)
This note generalises the value of life (VOL) to include the preferences for descendants of a dynastically altruistic decision-maker. The VOL can then be decomposed into the value of own survival and the value of progeny. Conventional models tend to underestimate the value of life by measuring the value of own survival alone. We show how the value of progeny depends on the nature of dynastic altruism: Preferences about population/family size vary between the Benthamite (total utility aggregated over all individuals) and Millian (per capita utility of a representative of each cohort) extremes. The lower the value the decision-maker attaches to population size the lower the value of progeny. Within a stationary economy where all individuals (present and future) have the same scope for consumption, for all preferences but the Benthamite extreme, the progenitor attaches a lower value to the life of a (newborn) individual than the individual would itself. We illustrate by way of a numerical example.