Pricing Lives: International Guideposts for Safety

26 Pages Posted: 7 Feb 2018

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

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Date Written: October 27, 2017

Abstract

Government agencies throughout the world use the value of a statistical life (VSL) to monetize the mortality risk reduction benefits of government policies. The most reliable empirical estimates of the VSL using U.S. labor market data are about US$10 million (year 2015 U.S. dollars). Based on international estimates of the income elasticity of the VSL, one can transfer these values to other countries, leading to my VSL estimate for Australia of US$7.9 million, or A$10.0 million, which is over double the current Australia best practices number. Transferring U.S. VSL estimates to other nations after accounting for income differences will boost global VSL estimates. Potential refinements of the VSL based on age and income are also feasible. The VSL could serve a pivotal role in promoting safety by valuing lives in litigation contexts, regulatory sanctions, and corporate risk analyses.

Suggested Citation

Viscusi, W. Kip, Pricing Lives: International Guideposts for Safety (October 27, 2017). Vanderbilt Law Research Paper No. 18-06, Available at SSRN: https://ssrn.com/abstract=3112897 or http://dx.doi.org/10.2139/ssrn.3112897

W. Kip Viscusi (Contact Author)

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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

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