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The Value of LifeW. Kip ViscusiVanderbilt 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 New Palgrave Dictionary of Economics and the Law, 2nd Edition Vanderbilt Law and Economics Research Paper No. 08-04 Abstract: The economic approach to valuing risks to life focuses on risk-money tradeoffs for very small risks of death, or the value of statistical life (VSL). These VSL levels will generally exceed the optimal insurance amounts. A substantial literature has estimated the wage-fatality risk tradeoffs, implying a median VSL of $7 million for U.S. workers. International evidence often indicates a lower VSL, which is consistent with the lower income levels in less developed countries. Preference heterogeneity also generates different tradeoff rates across the population as people who are more willing to bear risk will exhibit lower wage-risk tradeoffs.
Number of Pages in PDF File: 18 Keywords: value of life, risk regulation JEL Classification: I10, J17, J28 Accepted Paper SeriesDate posted: October 14, 2005 ; Last revised: November 27, 2012Suggested CitationContact Information
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