Document Type

Working Paper

Date

2009

Embargo Period

6-28-2012

Keywords

value of statistical life, VSL, quantile regression, panel data, fixed effects, PSID, fatality risk, CFOI

Language

English

Disciplines

Statistics and Probability

Description/Abstract

We examine differences in the value of statistical life (VSL) across potential wage levels in panel data using quantile regressions with intercept heterogeneity. Latent heterogeneity is econometrically important and affects the estimated VSL. Our findings indicate that a reasonable average cost per expected life saved cut-off for health and safety regulations is $7 million to $8 million per life saved, but the VSL varies considerably cross the labor force. Our results reconcile the previous discrepancies between hedonic VSL estimates and the values implied by theories linked to the coefficient of relative risk aversion. Because the VSL varies elastically with income, regulatory agencies should regularly update the VSL used in benefit assessments, increasing the VSL proportionally with changes in income over time.

Additional Information

Harvest from RePEc at http://repec.org

Source

Metadata from RePEc

Creative Commons License


This work is licensed under a Creative Commons Attribution 3.0 License.