Heterogeneity in the Value of Life

Joseph Aldy () and Seamus J. Smyth

RFF Working Paper Series from Resources for the Future

Abstract: We develop a numerical life-cycle model -- with choice over consumption and leisure, stochastic mortality and labor income processes, and calibrated to U.S. data -- to characterize willingness to pay (WTP) for mortality risk reduction. Our theoretical framework can explain many empirical findings in this literature, including an inverted-U life-cycle WTP and an order of magnitude difference in prime-aged adults WTP. By endogenizing leisure and employing multiple income measures, we reconcile the literature's large variation in estimated income elasticities. By accounting for gender- and race-specic stochastic mortality and income processes, we explain the literature's black-white and female-male differences.

Keywords: value of statistical life; mortality risk reduction; income elasticity (search for similar items in EconPapers)
JEL-codes: D91 J17 Q51 (search for similar items in EconPapers)
Date: 2014-05-21
New Economics Papers: this item is included in nep-hea and nep-rmg
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Heterogeneity in the Value of Life (2014)
Working Paper: Heterogeneity in the Value of Life (2014)
Working Paper: Heterogeneity in the Value of Life (2014)
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