Policy Relevant Heterogeneity in the Value of Statistical Life: New Evidence from Panel Data Quantile Regressions

Thomas Kniesner, W Viscusi and James Ziliak

No 4508, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 across 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.

Keywords: value of statistical life; panel data; fatality risk; quantile regression; CFOI; PSID; VSL; fixed effects (search for similar items in EconPapers)
JEL-codes: C23 I10 J17 J28 K00 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2009-10
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: Journal of Risk and Uncertainty, 2010, 40 (1), 15-32

Downloads: (external link)
https://docs.iza.org/dp4508.pdf (application/pdf)

Related works:
Journal Article: Policy relevant heterogeneity in the value of statistical life: New evidence from panel data quantile regressions (2010)
Working Paper: Policy Relevant Heterogeneity in the Value of Statistical Life: New Evidence from Panel Data Quantile Regressions (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp4508

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().