The Value of a Statistical Life: Estimates Based on the Concept of Human Capital

Стоимость статистической жизни: оценки на основе концепции человеческого капитала

Anastasia Kosyakina and Ekaterina A. Ponomareva
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Ekaterina A. Ponomareva: Russian Presidential Academy of National Economy and Public Administration

Ekonomicheskaya Politika / Economic Policy, 2021, vol. 6, 94 - 119

Abstract: Despite the fact that the life of a particular person does not have a direct cost, the issues of economic feasibility of financing programs aimed at reducing risks to the life and health of individuals, as well as regulation of markets to ensure the safety of citizens, are closely related to the concept of the value of statistical life. This value reflects the willingness of individuals to pay for reducing risks to their own life and health, and is used by economists when analyzing the costs and benefits of policymakers’ decisions. The systematic methodology for calculating the value of statistical life is especially important due to the current transition to risk-oriented regulation, one of the most fundamental principles of which is to take into account potential damage both when establishing mandatory legal requirements aimed at protecting life and health of citizens, and when assessing compensation for damage caused in judicial practice. The article provides an overview of the existing methods of statistical life evaluation. Using an econometric analysis of Rosstat data on wages and fatal injuries, the value of statistical life in Russia was evaluated at 15.8 and 26.3 million rubles, depending on the specification used. The alternative approaches to obtaining the monetary equivalent of human life in Russia are presented: the value of life is calculated using the lost income method; also, information on the monetary compensations for relatives of the victims in Russian legislation is analyzed. The limitations of the above methods of life evaluation are discussed, and so are problematic issues associated with the implementation of the study results in public policy, especially in the field of control and supervisory regulation.

Keywords: compensation for risk; hedonic regression; occupational injury; risk-oriented regulation; shadow prices (search for similar items in EconPapers)
Date: 2021
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