Description/Abstract
Our research addresses fundamental long-standing concerns in the compensating wage differentials literature and its public policy implications: the econometric properties of estimates of the value of statistical life (VSL) and the wide range of such estimates from about $0 to almost $30 million. Here we address most of the prominent econometric issues by applying panel data, a new and more accurate fatality risk measure, and systematic application of panel data estimators. Controlling for measurement error, endogeneity, latent individual heterogeneity that may be correlated with the regressors, state dependence, and sample composition yields an estimated value of a statistical life of about $7 million–$12 million, which we show can clarify greatly the cost-effectiveness of regulatory decisions. We show that probably the most important econometric issue is controlling for latent heterogeneity; less important is how one does it.
Document Type
Working Paper
Date
3-2010
Keywords
Panel data, fixed effects, random effects, long-differences, PSID
Language
English
Series
Working Papers Series
Disciplines
Public Policy
Recommended Citation
Kniesner, Thomas J.; Viscusi, W. Kip; and Woock, Christopher, "The Value of a Statistical Life: Evidence from Panel Data" (2010). Center for Policy Research. 44.
https://surface.syr.edu/cpr/44
Source
Metadata from RePEc
Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.
Additional Information
Working paper no. 122
Harvest from RePEc at http://repec.org