Professors Kevin Murphy and Robert Topel from the University of Chicago Graduate School of Business have won the Kenneth J. Arrow Award for the best research paper in health economics. The award is given annually by the International Health Economics Association.
Murphy and Topel were cited for their paper “The Value of Health and Longevity,” published in the Journal of Political Economy. They will receive the award in Copenhagen in July at the sixth World Congress of the association.
Chicago GSB Professor Gary Becker won the award last year for his paper “The Quantity and Quality of Life and the Evolution of World Inequality,” co-authored with Thomas Philipson, a professor at the University of Chicago’s Harris School of Public Policy Studies and Rodrigo Soares of the University of Maryland.
In their paper Murphy and Topel found that cumulative gains in life expectancy after 1900 were worth more than $1.2 million to the average American in 2000, whereas post-1970 gains added about $3.2 trillion per year to national wealth, equal to about half of gross domestic product (GDP).
Potential gains from future health improvements are also large, they found. For example, a one percent reduction in cancer mortality would be worth $500 billion.
Murphy is the George J. Stigler Distinguished Service Professor of Economics. Topel is the Isidore Brown and Gladys J. Brown Professor in Urban and Labor Economics.
The International Health Economics Association was formed in the early 1990s to increase communication among health economists, foster a higher standard of debate in the application of economics to health and health care systems, and assist young researchers at the start of their careers. The group represents 2,000 health economists in 72 countries.
The Arrow Award is named in honor of Kenneth Arrow, professor emeritus at Stanford University and the 1972 winner of the Nobel Memorial Prize in Economic Sciences. Arrow’s groundbreaking research on risk and insurance remains one of the foundations of modern health economics.