Effect of Income Heterogeneity on Valuation of Mortality Risk in Taiwan: An Application of Unconditional Quantile Regression Method

Je-Liang Liou
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Je-Liang Liou: The Center for Green Economy, Chung-Hua Institution for Economic Research, No. 75 Chang-Hsing Street, Taipei 10672, Taiwan

IJERPH, 2019, vol. 16, issue 9, 1-15

Abstract: According to theory and existing empirical results, heterogeneity in personal characteristics, with income variation being one of them, affects the marginal willingness to pay (WTP) for reducing fatal risk. In this study, the effect of income heterogeneity on the value of statistical life (VSL) in Taiwan through unconditional quantile regression analysis using the data collected by the “Manpower Utilization Survey” is investigated. The results of this empirical study show that the hedonic wage function that was constructed using empirical data from Taiwan was in line with the general form of non-linear function rather than the semi-log function that has been often used in previous studies, which should have great impact on the estimation of the VSL. The empirical results also show that the estimated VSL of Taiwanese labor varied with the difference in wages, which needs to be taken into account when discussing the public policies using VSL.

Keywords: value of statistical life; income heterogeneity; hedonic wage function; Box-Cox transform; unconditional quantile regression (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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