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Pinning Down the Value of Statistical Life

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Author Info
Thomas J. Kniesner () (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020)
W. Kip Viscusi
Christopher Woock
James P. Ziliak

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Abstract

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 $0.5 million to about $21 million. We address most of the prominent econometric issues by applying panel data, a new and more accurate fatality risk measure, and systematic selection of panel estimator in our research. Controlling for measurement error, endogeneity, individual heterogeneity, and state dependence yields both a reasonable average level and narrow range for the estimated value of a statistical life of about $5.5-$7.5 million.

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File URL: http://www-cpr.maxwell.syr.edu/cprwps/pdf/wp85.pdf
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Publisher Info
Paper provided by Center for Policy Research, Maxwell School, Syracuse University in its series Center for Policy Research Working Papers with number 85.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 29 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:max:cprwps:85

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Postal: 426 Eggers Hall, Syracuse, New York USA 13244-1020
Phone: (315) 443-3114
Fax: (315) 443-1081
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Web page: http://www-cpr.maxwell.syr.edu
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Find related papers by JEL classification:
J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
I12 - Health, Education, and Welfare - - Health - - - Health Production

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hwang, Hae-shin & Reed, W Robert & Hubbard, Carlton, 1992. "Compensating Wage Differentials and Unobserved Productivity," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 835-58, August. [Downloadable!] (restricted)
  2. Thomas Kniesner & W. Viscusi & James Ziliak, 2006. "Life-Cycle Consumption and the Age-Adjusted Value of Life," Contributions to Economic Analysis & Policy, Berkeley Electronic Press, vol. 5(1), pages 1524-1524. [Downloadable!] (restricted)
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  3. Orley Ashenfelter, 2006. "Measuring the Value of a Statistical Life: Problems and Prospects," IZA Discussion Papers 1911, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Orley Ashenfelter & Michael Greenstone, 2004. "Estimating the Value of a Statistical Life: The Importance of Omitted Variables and Publication Bias," Working Papers 3, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  5. Ziliak, J.P. & Kniesner, T.J., 1996. "The importance of sample attrition in life cycle labor supply estimation," Discussion Paper 46, Tilburg University, Center for Economic Research. [Downloadable!]
  6. MaCurdy, Thomas E., 1982. "The use of time series processes to model the error structure of earnings in a longitudinal data analysis," Journal of Econometrics, Elsevier, vol. 18(1), pages 83-114, January. [Downloadable!] (restricted)
  7. Kevin Lang & Sumon Majumdar, 2004. "The Pricing Of Job Characteristics When Markets Do Not Clear: Theory And Policy Implications," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1111-1128, November. [Downloadable!] (restricted)
  8. Michael P. Keane, 1991. "Individual heterogeneity and interindustry wage differentials," Discussion Paper / Institute for Empirical Macroeconomics 54, Federal Reserve Bank of Minneapolis. [Downloadable!]
  9. Black, Dan A & Kniesner, Thomas J, 2003. " On the Measurement of Job Risk in Hedonic Wage Models," Journal of Risk and Uncertainty, Springer, vol. 27(3), pages 205-20, December. [Downloadable!] (restricted)
  10. W. Kip Viscusi & Joseph E. Aldy, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," NBER Working Papers 9487, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Hannes Spengler & Sandra Schaffner, 2007. "Using Job Changes to Evaluate the Bias of the Value of a Statistical Life," Discussion Papers of DIW Berlin 713, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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  12. Ivar Ekeland & James J. Heckman & Lars Nesheim, 2004. "Identification and Estimation of Hedonic Models," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S60-S109, February. [Downloadable!] (restricted)
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  13. Jason F. Shogren & Tommy Stamland, 2002. "Skill and the Value of Life," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 1168-1197, October. [Downloadable!] (restricted)
  14. Brown, Charles, 1980. "Equalizing Differences in the Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 94(1), pages 113-34, February. [Downloadable!] (restricted)
  15. Orley Ashenfelter & Michael Greenstone, 2004. "Using Mandated Speed Limits to Measure the Value of a Statistical Life," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S226-S267, February. [Downloadable!] (restricted)
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  16. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February. [Downloadable!] (restricted)
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  17. Gary Solon, 1986. "Bias in Longitudinal Estimation of Wage Gaps," NBER Technical Working Papers 0058, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  18. W. Kip Viscusi, 2004. "The Value of Life: Estimates with Risks by Occupation and Industry," Economic Inquiry, Oxford University Press, vol. 42(1), pages 29-48, January. [Downloadable!] (restricted)
  19. Abowd, John M & Card, David, 1989. "On the Covariance Structure of Earnings and Hours Changes," Econometrica, Econometric Society, vol. 57(2), pages 411-45, March. [Downloadable!] (restricted)
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  20. Lillard, Lee A & Weiss, Yoram, 1979. "Components of Variation in Panel Earnings Data: American Scientists, 1960-70," Econometrica, Econometric Society, vol. 47(2), pages 437-54, March. [Downloadable!] (restricted)
  21. W. Kip Viscusi & Joni Hersch, 2001. "Cigarette Smokers As Job Risk Takers," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 269-280, May. [Downloadable!] (restricted)
  22. Arellano, Manuel, 1989. "A note on the Anderson-Hsiao estimator for panel data," Economics Letters, Elsevier, vol. 31(4), pages 337-341, December. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hannes Spengler & Sandra Schaffner, 2007. "Using Job Changes to Evaluate the Bias of the Value of a Statistical Life," Discussion Papers of DIW Berlin 713, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  2. Thomas DeLeire & Christopher Timmins, 2008. "Roy Model Sorting and Non-Random Selection in the Valuation of a Statistical Life," NBER Working Papers 14364, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Martinez Perez, Jorge Eduardo & Mendez Martinez, Ildefonso, 2008. "¿Qué podemos saber sobre el Valor Estadístico de la Vida en España utilizando datos laborales?," MPRA Paper 11165, University Library of Munich, Germany. [Downloadable!]
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