Valuing Pain using the Subjective Well-being Method / Thorhildur Ólafsdóttir, Tinna Laufey Ásgeirsdóttir, Edward C. Norton.

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Ólafsdóttir, Thorhildur

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w23649.Publication details: Cambridge, Mass. National Bureau of Economic Research 2017.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Chronic pain clearly lowers utility, but it is empirically challenging to estimate the monetary compensation needed to offset this utility reduction. We use the subjective well-being method to estimate the value of pain relief among individuals age 50 and older. We use a sample of 64,205 observations from 4 waves (2008-2014) of the Health and Retirement Study, a nationally representative individual-level survey data, permitting us to control for individual heterogeneity. Our models, which allow for nonlinear effects in income, show the value of avoiding pain ranging between 56 to 145 USD per day. These results are lower than previously reported, suggesting that the value of pain relief varies by income levels. Thus, previous estimates of the value of pain relief assuming constant monetary compensation for pain across income levels are heavily affected by the highest income level. Furthermore, we find that the value of pain relief increases with pain severity.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w23649 (Browse shelf(Opens below))	Not For Loan

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August 2017.

Chronic pain clearly lowers utility, but it is empirically challenging to estimate the monetary compensation needed to offset this utility reduction. We use the subjective well-being method to estimate the value of pain relief among individuals age 50 and older. We use a sample of 64,205 observations from 4 waves (2008-2014) of the Health and Retirement Study, a nationally representative individual-level survey data, permitting us to control for individual heterogeneity. Our models, which allow for nonlinear effects in income, show the value of avoiding pain ranging between 56 to 145 USD per day. These results are lower than previously reported, suggesting that the value of pain relief varies by income levels. Thus, previous estimates of the value of pain relief assuming constant monetary compensation for pain across income levels are heavily affected by the highest income level. Furthermore, we find that the value of pain relief increases with pain severity.