Age Differences in the Value of Statistical Life: Revealed Preference Evidence

Joseph E. Aldy () and W Kip Viscusi

Discussion Papers from Resources For the Future

Abstract: Revealed preference evidence, especially based on wage-risk tradeoffs in the labor market, provides the primary empirical basis for analyses of the value of statistical life (VSL). This market evidence also provides guidance on how VSL varies with age. While labor market studies have generated conflicting evidence—some showing that VSL rises with age and others showing that VSL declines with age—more refined estimates that take into account the age variation in job fatality risks or life-cycle patterns of consumption show an inverted-U relation between the VSL and age. The value of a statistical life year shows a similar pattern and is not time-invariant. Applying estimates of the VSL-age relationship to an analysis of the Clear Skies initiative illustrates the implications of recognizing the age-VSL relationship.

Keywords: value of statistical life; VSL; value of statistical life year; risk (search for similar items in EconPapers)
JEL-codes: I10 J17 J28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea and nep-ias
Date: 2007-04-06
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Journal Article: Age Differences in the Value of Statistical Life: Revealed Preference Evidence (2007)
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