Willingness to Accept Equals Willingness to Pay for Labor Market Estimates of the Value of Statistical Life
34 Pages Posted: 22 Feb 2013 Last revised: 4 Mar 2014
Date Written: October 18, 2013
Our research clarifies the conceptual linkages among willingness to pay for additional safety, willingness to accept less safety, and the value of a statistical life (VSL). We present econometric estimates using panel data to analyze the VSL levels associated with job changes that may affect the worker’s exposure to fatal injury risks. Our baseline VSL estimates are $7.7 million and $8.3 million ($2001). There is no statistically significant divergence between willingness-to-accept VSL estimates associated with wage increases for greater risks and willingness-to-pay VSL estimates as reflected in wage changes for decreases in risk. Our focal result contrasts with the literature documenting a considerable asymmetry in tradeoff rates for increases and decreases in risk. An important implication for policy is that it is reasonable to use labor market estimates of VSL as a measure of the willingness to pay for additional safety.
Keywords: willingness to pay, willingness to accept, value of statistical life, VSL, CFOI, panel data
JEL Classification: I10, J17, J28, K00, C23
Suggested Citation: Suggested Citation