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Age Differences in the Value of Statistical Life: Revealed Preference Evidence

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Author Info
Aldy, Joseph E. () (Resources for the Future)
Viscusi, W. Kip

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Abstract

Revealed preference evidence, especially based on wage-risk tradeoffs in the labor market, provides the primary empirical basis for analyses of the value of statistical life (VSL). This market evidence also provides guidance on how VSL varies with age. While labor market studies have generated conflicting evidence—some showing that VSL rises with age and others showing that VSL declines with age—more refined estimates that take into account the age variation in job fatality risks or life-cycle patterns of consumption show an inverted-U relation between the VSL and age. The value of a statistical life year shows a similar pattern and is not time-invariant. Applying estimates of the VSL-age relationship to an analysis of the Clear Skies initiative illustrates the implications of recognizing the age-VSL relationship.

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Paper provided by Resources For the Future in its series Discussion Papers with number dp-07-05.

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Date of creation: 06 Apr 2007
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Handle: RePEc:rff:dpaper:dp-07-05

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Related research
Keywords: value of statistical life; VSL; value of statistical life year; risk;

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Find related papers by JEL classification:
I10 - Health, Education, and Welfare - - Health - - - General
J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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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. Moore, Michael J & Viscusi, W Kip, 1988. "The Quantity-Adjusted Value of Life," Economic Inquiry, Oxford University Press, vol. 26(3), pages 369-88, July.
  2. Ronald Meng, 1989. "Compensating Differences in the Canadian Labour Market," Canadian Journal of Economics, Canadian Economics Association, vol. 22(2), pages 413-24, May. [Downloadable!] (restricted)
  3. Moore, Michael J & Viscusi, W Kip, 1990. " Models for Estimating Discount Rates for Long-term Health Risks Using Labor Market Data," Journal of Risk and Uncertainty, Springer, vol. 3(4), pages 381-401, December.
  4. Viscusi, W. Kip & Aldy, Joseph, 2006. "Labor Market Estimates of the Senior Discount for the Value of Statistical Life," Discussion Papers dp-06-12, Resources For the Future. [Downloadable!]
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  5. V. Kerry Smith & Mary F. Evans & Hyun Kim & Donald H. Taylor, 2004. "Do the Near-Elderly Value Mortality Risks Differently?," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 423-429, 03. [Downloadable!] (restricted)
  6. Arnould, Richard J & Nichols, Len M, 1983. "Wage-Risk Premiums and Workers' Compensation: A Refinement of Estimates of Compensating Wage Differential," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 332-40, April. [Downloadable!] (restricted)
  7. Dreyfus, Mark K & Viscusi, W Kip, 1995. "Rates of Time Preference and Consumer Valuations of Automobile Safety and Fuel Efficiency," Journal of Law & Economics, University of Chicago Press, vol. 38(1), pages 79-105, April.
  8. 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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  9. Shanmugam, K R, 2001. " Self Selection Bias in the Estimates of Compensating Differentials for Job Risks in India," Journal of Risk and Uncertainty, Springer, vol. 22(3), pages 263-75, May. [Downloadable!] (restricted)
  10. Viscusi, W. Kip & Moore, Michael J., 1989. "Rates of time preference and valuations of the duration of life," Journal of Public Economics, Elsevier, vol. 38(3), pages 297-317, April. [Downloadable!] (restricted)
  11. Aldy, Joseph E. & Viscusi, W. Kip, 2006. "Adjusting the Value of a Statistical Life for Age and Cohort Effects," Discussion Papers dp-06-19, Resources For the Future. [Downloadable!]
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  12. Alan Krupnick, 2007. "Mortality-risk Valuation and Age: Stated Preference Evidence," Review of Environmental Economics and Policy, Oxford University Press for Association of Environmental and Resource Economists, vol. 1(2), pages 261-282, Summer. [Downloadable!] (restricted)
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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. Mary F. Evans & V. Kerry Smith, 2008. "Complementarity and the Measurement of Individual Risk Tradeoffs: Accounting for Quantity and Quality of Life Effects," NBER Working Papers 13722, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Henrik Andersson, 2008. "Willingness to Pay for Car Safety: Evidence from Sweden," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 41(4), pages 579-594, December. [Downloadable!] (restricted)
  3. Rachel Baker & Susan Chilton & Michael Jones-Lee & Hugh Metcalf, 2008. "Valuing lives equally: Defensible premise or unwarranted compromise?," Journal of Risk and Uncertainty, Springer, vol. 36(2), pages 125-138, April. [Downloadable!] (restricted)
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