Anchoring Biases in International Estimates of the Value of a Statistical Life

52 Pages Posted: 12 Jan 2017 Last revised: 6 Mar 2017

See all articles by W. Kip Viscusi

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

Clayton Masterman

Vanderbilt University - Law and Economics, Students

Date Written: January 30, 2017

Abstract

U.S. labor market estimates of the value of a statistical life (VSL) were the first revealed preference estimates of the VSL in the literature and continue to constitute the majority of such market estimates. The VSL estimates in U.S. studies consequently may have established a reference point for the estimates that researchers analyzing data from other countries are willing to report and that journals are willing to publish. This article presents the first comparison of the publication selection biases in U.S. and international estimates using a sample of 68 VSL studies with over 1,000 VSL estimates throughout the world. Publication selection biases vary across the VSL distribution and are greater for the larger VSL estimates. The estimates of publication selection biases distinguish between U.S. and international studies as well as between government and non-government data sources. Empirical estimates that correct for the impact of these biases reduce the VSL estimates, particularly for studies based on international data. This pattern of publication bias effects is consistent with international studies relying on U.S. estimates as an anchor for the levels of reasonable estimates. U.S. estimates based on the Census of Fatal Occupational Injuries constitute the only major set of VSL studies for which there is no evidence of statistically significant publication selection effects. Adjusting a baseline bias-adjusted U.S. VSL estimate of $9.6 million using estimates of the income elasticity of the VSL may be a sounder approach to generating international estimates of the VSL than relying on direct estimates from international studies.

Keywords: Value of a Statistical Life, Fatality Risk, Publication Bias, Anchoring Effect, Reference Dependence, Meta-Analysis, VSL

JEL Classification: I18, I12, K32, J17, J31

Suggested Citation

Viscusi, W. Kip and Masterman, Clayton, Anchoring Biases in International Estimates of the Value of a Statistical Life (January 30, 2017). Journal of Risk and Uncertainty, Forthcoming; Vanderbilt Public Law Research Paper No. 17-2; Vanderbilt Law and Economics Research Paper No. 17-1. Available at SSRN: https://ssrn.com/abstract=2896954 or http://dx.doi.org/10.2139/ssrn.2896954

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

Clayton Masterman

Vanderbilt University - Law and Economics, Students ( email )

Nashville, TN
United States

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