Pinning Down the Value of Statistical Life

Thomas J. Kniesner (), W Kip Viscusi, Christopher Woock () and James P. Ziliak ()
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James P. Ziliak: University of Kentucky

No 3107, IZA Discussion Papers from Institute for the Study of Labor (IZA)

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 $0.5 million to about $21 million. We address most of the prominent econometric issues by applying panel data, a new and more accurate fatality risk measure, and systematic selection of panel estimator in our research. Controlling for measurement error, endogeneity, individual heterogeneity, and state dependence yields both a reasonable average level and narrow range for the estimated value of a statistical life of about $5.5-$7.5 million.

Keywords: VSL; panel data; fixed effects; random effects; PSID (search for similar items in EconPapers)
JEL-codes: I10 J17 J28 K00 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea, nep-ias and nep-law
Date: 2007-10
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Working Paper: Pinning Down the Value of Statistical Life (2006)
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