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Stability of Estimates of the Compensation for Danger

A. Marin and Reza (Gholamreza) Arabsheibani ()

No 98/15, Royal Holloway, University of London: Discussion Papers in Economics from Department of Economics, Royal Holloway University of London

Abstract: Estimates of the extra earnings for jobs with higher risks of death can be used in cost-benefit studies involving risk changes. Because of this use, the magnitude and stability of the estimated coefficient are important. Part of the current study closely reproduces a widely quoted 1982 study by Marin & Psacharopoulos to check on the stability. We also examine the robustness of the estimate to the inclusion/exclusion of non-fatal risks and other relevant characteristics. While the magnitude of the co-efficient has increased threefold from the earlier study, the coefficient is robust to other changes in the specification. There could be selectivity bias in the estimates of the extra return because people can select their occupation on the basis of its riskiness. Our findings suggest that one common technique to deal with selectivity bias in a continuous variable can give unreliable results in practice.

Keywords: Cost-Benefit; Value of Life; Labour market; Selectivity bias (search for similar items in EconPapers)
JEL-codes: C24 D61 H43 J17 J28 J31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 1998-02, Revised 1998-02
New Economics Papers: this item is included in nep-hea
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Related works:
Journal Article: Stability of Estimates of the Compensation for Danger (2000) Downloads
Journal Article: Stability of Estimates of the Compensation for Danger (2000) Downloads
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