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.
Document Type
Working Paper
Date
2009
Keywords
value of statistical life, VSL, quantile regression, panel data, fixed effects, PSID, fatality risk, CFOI
Language
English
Series
Working Papers Series
Disciplines
Statistics and Probability
Recommended Citation
Kniesner, Thomas J. and Viscusi, W. Kip, "Policy Relevant Heterogeneity in the Value of Statistical Life: New Evidence from Panel Data Quantile Regressions" (2009). Center for Policy Research. 48.
https://surface.syr.edu/cpr/48
Source
Metadata from RePEc
Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.
Additional Information
Working paper no. 118
Harvest from RePEc at http://repec.org