Adjusting the Value of a Statistical Life for Age and Cohort Effects

Joseph E. Aldy () and W Kip Viscusi

Discussion Papers from Resources For the Future

Abstract: To resolve the theoretical ambiguity in the effect of age on the value of statistical life (VSL), this article uses a novel, age-dependent fatal risk measure to estimate age-specific hedonic wage regressions. VSL exhibits an inverted-U shaped relationship with age. In the year 2000 cross-section, workers’ VSL rises from $3.2 million (ages 18–24), to $9.9 million (35–44), and declines to $3.8 million (55–62). Controlling for birth-year cohort effects in a minimum distance estimator yields a peak VSL of $7.8 million at age 46 and flattens the VSL-age relationship. The value of statistical life-year also follows an inverted-U shape with age.

Keywords: value of statistical life; job risks; hedonic wage regression; VSLY (search for similar items in EconPapers)
JEL-codes: J17 I12 (search for similar items in EconPapers)
Date: 2006-04-10
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Journal Article: Adjusting the Value of a Statistical Life for Age and Cohort Effects (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:rff:dpaper:dp-06-19

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