The Heterogeneity of the Value of Statistical Life: Introduction and Overview
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
November 25, 2009
Journal of Risk and Uncertainty, Vol. 40, No. 1, February 2010
Vanderbilt Law and Economics Research Paper No. 09-32
The refinement in worker fatality risk data used in hedonic wage studies and evidence from new stated preference studies have facilitated the exploration of the heterogeneity of the value of statistical life (VSL). Although the median VSL estimate for workers is $7-$8 million, the VSL varies considerably within the worker population. New estimates of the income elasticity of VSL are 1.0 or above, which are consistent with theoretical models linking VSL to the coefficient of relative risk aversion. The specific relationship between VSL and risk aversion is, however, more complex than previously understood. Age differences in VSL are substantial, with young children being accorded especially high VSL amounts. The public’s willingness to pay to reduce risks is reduced if those being protected are perceived as being blameworthy due to their responsibility for contributing to the risk.
Number of Pages in PDF File: 25
Keywords: value of statistical life, fatality risk, VSL, income elasticity, blame, children
JEL Classification: I10, J17, J28, K00, C23Accepted Paper Series
Date posted: December 2, 2009
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