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Misuses and Proper Uses of Hedonic Values of Life

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

August 2000

Harvard Law and Economics Discussion Paper No. 292

Abstract:
Estimates of the statistical value of life have become the standard reference point for valuing risks to life and health in regulatory contexts. Attempts to use these estimates in courtroom settings as a measure of compensation are misdirected. The value-of-life estimates are based on a deterrence or prevention concept rather than an insurance concept and will provide overinsurance to accident victims. Value-of-life estimates are, however, pertinent for use as reference points in assessing liability. Possible examples of where it can be used include cases such as the Ford Pinto and GMC truck burn cases.

JEL Classifications: D80, J17

Working Paper Series

Date posted: September 01, 2000 ; Last revised: September 01, 2000

Suggested Citation

Viscusi, W. Kip, Misuses and Proper Uses of Hedonic Values of Life (August 2000). Harvard Law and Economics Discussion Paper No. 292. Available at SSRN: http://ssrn.com/abstract=239971 or doi:10.2139/ssrn.239971

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