The monetary valuation of lifetime health improvement and life expectancy gains in Turkey

Abstract

The main objective of this study is to estimate the monetary value of the gains of healthy days and life expectancy due to the ambient air quality standard that came into effect in 2014 by estimating the country-specific value of a life year (VOLY) and the value of the healthier and longer life (VHLL) for Turkey. Contingent valuation method is adopted to reveal individuals’ willingness to pay for an improvement of health condition and the extension of their life expectancy by avoiding respiratory and lung related illnesses. VHLL is composed of two parts, WTP for an extension of one’s life years (VOLY) and for an increase in the number of healthy days throughout one’s life time (VHLL-VOLY). We found that close to 80% of WTP is allocated to the latter component of VHLL and only 20% is for VOLY mainly due to Islamic beliefs of the respondents. A total of 1314 observations are collected by face-to-face interviews from Afsin-Elbistan, Kutahya-Tavsanli and Ankara. The estimated VHLL and VOLY are [41,750 TL, 10,258 TL] with all the observations, [30,185 TL, 7132 TL] for Afsin-Elbistan, [31,718 TL, 7081 TL] for Kutahya-Tavsanli and [52,334 TL, 14,813 TL] for Ankara. The Inverse-U shaped relationship between Age and WTP is confirmed. The income elasticities of WTP is found to be close to 0.5 for all study areas while an Inverse-U shaped relationship between the household income and Income Elasticity of WTP is observed in the income group based analysis. Age and household income are the two prominent determinants of VHLL.