Well-Being Measures of Mortality Risks: Life-Cycle Contradictions and Ordinal Index Challenges

Vanderbilt Law Research Paper No. 19-25

Behavioural Public Policy, Forthcoming

16 Pages Posted: 16 Sep 2019

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

Date Written: September 13, 2019

Abstract

The value of a statistical life (VSL) monetizes the expected loss in well-being associated with the risk of death. The utility loss resulting from a fatality is central to the empirical framework for estimating the VSL. The VSL trajectory over the life cycle exhibits an inverted-U shape, following a trajectory similar to that of lifetime patterns of consumption. The U shaped pattern displayed by happiness measures over the life cycle is the opposite of the inverted-U shape pattern displayed by the VSL. It is consequently inappropriate to use happiness measures as ordinal ranking substitutes for the VSL for purposes of estimating the benefits of mortality risk reduction. Compared to ordinal well-being scales, the VSL also offers a variety of additional capabilities by providing a cardinal index of the unit benefits for changes in mortality risks.

Keywords: value of a statistical life, VSL, well-being, happiness, life satisfaction, mortality risk, life cycle

JEL Classification: K32, J17, D61, D91

Suggested Citation

Viscusi, W. Kip, Well-Being Measures of Mortality Risks: Life-Cycle Contradictions and Ordinal Index Challenges (September 13, 2019). Vanderbilt Law Research Paper No. 19-25. Available at SSRN: https://ssrn.com/abstract=3453464

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

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