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

See all articles by Thomas J. Kniesner

Thomas J. Kniesner

Syracuse University - Department of Economics; IZA Institute of Labor Economics

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

James P. Ziliak

University of Kentucky - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 18, 2013

Abstract

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

Kniesner, Thomas J. and Viscusi, W. Kip and Ziliak, James P., Willingness to Accept Equals Willingness to Pay for Labor Market Estimates of the Value of Statistical Life (October 18, 2013). Journal of Risk and Uncertainty, Vol. 48, No. 3, June 2014, Forthcoming; Vanderbilt Law and Economics Research Paper 13-06. Available at SSRN: https://ssrn.com/abstract=2221038 or http://dx.doi.org/10.2139/ssrn.2221038

Thomas J. Kniesner

Syracuse University - Department of Economics ( email )

Syracuse, NY 13244-1020
United States
315-443-4589 (Phone)
315-443-1081 (Fax)

IZA Institute of Labor Economics

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

W. Kip Viscusi (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vanderbilt University - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

James P. Ziliak

University of Kentucky - Department of Economics ( email )

Lexington, KY 40506
United States

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