A note on the willingness to pay approach to the valuation of longevity

A modification of Freeman's model of willingness to pay for reduction of environmental risk to life is presented. Rather than treating work-related, consumption-related, and exogenous hazards as additive components of an overall level of safety, the revised model acknowledges the interdependence of these components. The results derived from this approach imply that (a) willingness to pay for a marginal reduction in risk depends upon the individual's initial level of utility; and (b) willingness to pay for a reduction in a given component of safety is related to the level of each component risk. The results of the revised model become more dramatic at higher levels of risk.