Valuing mother and child health: The intrauterine environment Stefanos A. Nastis a, *, Thomas D. Crocker b a Aristotle University of Thessaloniki, Department of Agricultural Economics, P.O. Box 225, 54124 Thessaloniki, Greece b University of Wyoming, Laramie, WY 82071-3985, USA 1. Introduction The current U.S. Federal Agency Practice of health benefit valuation consists of transferring widely available adult health benefit valuations unadjusted to measure children’s health. In effect, this practice treats children as adults and assumes that the value of adult and child health is the same. 1 However, adults do not resemble children either biologically or economically. Differences between their biological responses to many identical environ- mental stressors are widely acknowledged. Furthermore, children live with adults whose internal household allocation and investment behaviors may amplify or temper these biological responses. The degree of ampli- fication or tempering may differ between adult and child because of differences in the choices adults make for themselves and for their children. The scope of activities adults choose for themselves is commonly less restricted than those they choose for their children. Also, adult investments in child health can be riskier and thus the return to human capital investments less than equivalent own – health investments, given that children have no performance records indicative of potential investment payoffs. Given concavity of health investments (Gross- man, 1972) in producing human capital, the marginal productivity of investments in children will exceed that of genetically similar adults. In general, the value to adults of own relative to children’s health improvements is an empirical question influenced by the relative prices and the properties of the not always identical health hazard risk – reduction technologies applied to adults and to children. Thus, a similar health hazard exposure may induce quite different marginal benefits and marginal costs for adult than for child health – physical, intellectual, and emotional. For these reasons, the current U.S. Federal Agency Practice of using unadjusted adult health eco- nomic benefit valuations to assess the benefits of improving children’s health is suspect. Economics and Human Biology 10 (2012) 318–328 A R T I C L E I N F O Article history: Received 10 September 2010 Received in revised form 22 March 2011 Accepted 22 March 2011 Available online 4 April 2011 JEL classification: D1 I1 Keywords: Benefit transfer Birthweight productivity Maternal health Child health A B S T R A C T The paper estimates the value a mother assigns to own health relative to child health. Estimation of relative health valuation requires the decomposition of a child health improvement into its direct effect on the child’s health and its indirect effect, through improvements in maternal health. Failure to distinguish the impact of the direct and indirect effects can lead to biased estimates. We consider the intrauterine environment of a pregnant mother and her unborn child, where maternal health inputs are choice variables and her health affects child health. The empirical estimates suggest that mothers value child health up to six times higher than own health, and that the relative value depends on maternal consumption patterns and household characteristics. ß 2011 Elsevier B.V. All rights reserved. * Corresponding author. Tel.: +30 2310998113; fax: +30 2310998828. E-mail address: snastis@auth.gr (S.A. Nastis). 1 See, for example, the health benefit transfer producers propounded in Kuchler and Golan (1999), and in U.S. Environmental Protection Agency (2000). Contents lists available at ScienceDirect Economics and Human Biology jou r nal h o mep age: h tt p://w ww.els evier .co m/lo c ate/eh b 1570-677X/$ – see front matter ß 2011 Elsevier B.V. All rights reserved. doi:10.1016/j.ehb.2011.03.003