Pinning Down the Value of Statistical Life
Thomas J. Kniesner
Syracuse University - Department of Economics; Institute for the Study of Labor (IZA)
W. Kip Viscusi
Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics
James P. Ziliak
University of Kentucky - Department of Economics
IZA Discussion Paper No. 3107
Our research addresses fundamental long - standing concerns in the compensating wage differentials literature and its public policy implications: the econometric properties of estimates of the value of statistical life (VSL) and the wide range of such estimates from about $0.5 million to about $21 million. We address most of the prominent econometric issues by applying panel data, a new and more accurate fatality risk measure, and systematic selection of panel estimator in our research. Controlling for measurement error, endogeneity, individual heterogeneity, and state dependence yields both a reasonable average level and narrow range for the estimated value of a statistical life of about $5.5 - $7.5 million.
Number of Pages in PDF File: 34
Keywords: VSL, panel data, fixed effects, random effects, PSID
JEL Classification: I10, J17, J28, K00working papers series
Date posted: November 14, 2007
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