The Value of Statistical Life for Seniors

Jonathan D. Ketcham, Nicolai Kuminoff and Nirman Saha

No 33165, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a new revealed preference framework to estimate the value of statistical life (VSL). Our framework starts from a hedonic model of health care in which heterogenous individuals choose how much to spend on medical services that reduce mortality risk. Their choices generate an equilibrium survival function that can be differentiated to recover their marginal willingness to pay for mortality risk reduction. Our IV estimator uses survey data on Americans over age 66, linked to their federal administrative records. The mean VSL is approximately $1 million at age 67 and increasing in health, income, education, and life expectancy.

JEL-codes: Q51 (search for similar items in EconPapers)
Date: 2024-11
New Economics Papers: this item is included in nep-age, nep-dcm, nep-dem, nep-hea and nep-lma
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