The Value of a Statistical Life Under Changes in Ambiguity

Han Bleichrodt, Christophe Courbage and Béatrice Rey ()
Additional contact information
Christophe Courbage: Haute Ecole de Gestion de Genève, University of Applied Sciences Western Switzerland (HES-SO)
Béatrice Rey: Univ Lyon, Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France

No 1832, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: The value of a statistical life (VSL) is a key parameter in the analysis of government policy. Most policy decisions are made under ambiguity. This paper studies the effect of changes in ambiguity perception on the value of a statistical life (VSL). We propose a definition of increases in ambiguity perception based on Ekern’s (1980) definition of increases in risk. Ambiguity aversion alone is not sufficient to lead to an increase in the VSL when the decision maker perceives more ambiguity. Our results highlight the importance of higher order ambiguity attitudes, particularly ambiguity prudence.

Keywords: Value of a statistical life; ambiguity; prudence; smooth ambiguity model; neoadditive preferences (search for similar items in EconPapers)
JEL-codes: D81 I18 Q51 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-hea and nep-upt
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ftp://ftp.gate.cnrs.fr/RePEc/2018/1832.pdf (application/pdf)

Related works:
Journal Article: The value of a statistical life under changes in ambiguity (2019)
Working Paper: The value of a statistical life under changes in ambiguity (2019)
Working Paper: The Value of a Statistical Life Under Changes in Ambiguity (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:1832

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