On the Measurement of Job Risk in Hedonic Wage Models

Journal of Risk and Uncertainty, Vol. 27, No. 3, 2003

Posted: 16 Apr 2011

See all articles by Dan Black

Dan Black

University of Chicago - Harris School of Public Policy

Thomas J. Kniesner

Claremont Graduate University - Department of Economic Sciences; Syracuse University - Department of Economics; IZA

Date Written: March 1, 2003

Abstract

We examine the incidence, form, and research consequences of measurement error in measure of fatal injury risk in U.S. workplaces using both BLS and NIOSH data. We find evidence of substantial measurement errors in the fatality risk researchers attach to individual workers when estimating the implicit price of risk and the value of a statistical life. We first examine possible classical attenuation bias in the fatality risk coefficient. However, because we also find non-classical measurement error that differs across multiple risk measures and is not independent of other regressors, more complex statistical procedures than a standard instrumental variables estimator need be applied to obtain statistically improved estimates of wage-fatality risk tradeoffs.

JEL Classification: J31

Suggested Citation

Black, Dan and Kniesner, Thomas J., On the Measurement of Job Risk in Hedonic Wage Models (March 1, 2003). Journal of Risk and Uncertainty, Vol. 27, No. 3, 2003. Available at SSRN: https://ssrn.com/abstract=1809861

Dan Black

University of Chicago - Harris School of Public Policy ( email )

1155 East 60th Street
Chicago, IL 60637
United States

Thomas J. Kniesner (Contact Author)

Claremont Graduate University - Department of Economic Sciences ( email )

Claremont, CA 91711
United States

Syracuse University - Department of Economics ( email )

Syracuse, NY 13244-1020
United States

IZA

P.O. Box 7240
Bonn, D-53072
Germany

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