The Value of a Statistical Life: Evidence from Panel Data
Christopher Woock () and
No 122, Center for Policy Research Working Papers from Center for Policy Research, Maxwell School, Syracuse University
Our research addresses fundamental long-standing concerns in the compensating wage differentials literature and its public policy implications: the econometric properties of estimates of the value of statistical life (VSL) and the wide range of such estimates from about $0 to almost $30 million. Here we address most of the prominent econometric issues by applying panel data, a new and more accurate fatality risk measure, and systematic application of panel data estimators. Controlling for measurement error, endogeneity, latent individual heterogeneity that may be correlated with the regressors, state dependence, and sample composition yields an estimated value of a statistical life of about $7 million–$12 million, which we show can clarify greatly the cost-effectiveness of regulatory decisions. We show that probably the most important econometric issue is controlling for latent heterogeneity; less important is how one does it.
Keywords: VSL; panel data; fixed effects; random effects; long-differences; PSID (search for similar items in EconPapers)
JEL-codes: C23 I10 J17 J28 K00 (search for similar items in EconPapers)
Pages: 41 pages
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Journal Article: The Value of a Statistical Life: Evidence from Panel Data (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:max:cprwps:122
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