Statistical analysis of value-of-life estimates using hedonic wage method

Georges Dionne () and Pierre-Carl Michaud

No 02-1, Working Papers from HEC Montreal, Canada Research Chair in Risk Management

Abstract: This research analyses the variability of value-of-life estimates. We find evidence that this variability may in large part be explained by differences in the methodologies used to estimate the value of life. Income elasticity for the value of life is found to be in the 1.07 to 1.72 interval, a result similar to that obtained by Miller (2000) and de Blaeij et al. (2000). We also analyze the relationship between the value of life and the initial probability of a fatal accident, often used in the literature as a proxy for the variation in the probability of death. We show that although the willingness to pay may increase with the probability of death, the value of life will decrease with this probability if the initial probability is less than one half. We draw conclusive evidence of such a relationship from a sample of 38 value-of-life estimates based on the hedonic-wage method.

Keywords: Value of life; willingness to pay; probability of death; estimate; methodology (search for similar items in EconPapers)
JEL-codes: D13 D61 D80 H43 H51 H53 I18 J38 J58 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2002-05-01
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Working Paper: Statistical Analysis of Value-of Life estimates using Hedonic Wage Method (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:crcrmw:2002_001

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