The Economic Value of Reducing Fatal and Non-Fatal Occupational Risks in Mexico City Using Actuarial- and Perceived-Risk Estimates

15 Pages Posted: 14 Jan 2005

See all articles by James K. Hammitt

James K. Hammitt

Harvard University

María Eugenia Ibarrarán

University of the Americas, Puebla

Date Written: January 2005

Abstract

Compensating wage differentials are used to estimate individuals' marginal rates of substitution between income and both fatal and non-fatal occupational-accident risks in the Mexico City Metropolitan Area. Data are obtained by in-person survey of almost 600 workers and include workers' perceived risks of fatal and non-fatal occupational accidents supplemented by actuarial-risk estimates from government statistics. Results using both actuarial- and perceived-risk estimates are reasonably consistent. Estimates of the value per statistical life are between US$235,000 and US$325,000, and estimates of the value per statistical non-fatal injury are between US$3,500 and US$11,000. These values are much smaller than corresponding estimates for high-income countries, but are consistent with the small number of prior estimates for lower-income countries.

Keywords: Health risk, hedonic wages, value per statistical life

JEL Classification: I18, D18, D69, D81, J17

Suggested Citation

Hammitt, James K. and Ibarrarán, María Eugenia, The Economic Value of Reducing Fatal and Non-Fatal Occupational Risks in Mexico City Using Actuarial- and Perceived-Risk Estimates (January 2005). Available at SSRN: https://ssrn.com/abstract=648684 or http://dx.doi.org/10.2139/ssrn.648684

James K. Hammitt (Contact Author)

Harvard University ( email )

718 Huntington Avenue
Boston, MA 02115
United States
617-432-4343 (Phone)
617-432-0190 (Fax)

María Eugenia Ibarrarán

University of the Americas, Puebla ( email )

Sta. Catarina Martir
Cholula, Puebla 72820 72810
Mexico

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