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Willingness to accept equals willingness to pay for labor market estimates of the value of a statistical life

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  • Thomas Kniesner
  • W. Viscusi
  • James Ziliak

Abstract

Our research clarifies the conceptual linkages among willingness to pay for additional safety, willingness to accept less safety, and the value of a statistical life (VSL). We present econometric estimates using panel data to analyze the VSL levels associated with job changes that may affect the worker’s exposure to fatal injury risks. Our baseline VSL estimates are $7.7 million and $8.3 million (Y$2001). There is no statistically significant divergence between willingness-to-accept VSL estimates associated with wage increases for greater risks and willingness-to-pay VSL estimates as reflected in wage changes for decreases in risk. Our focal result contrasts with the literature documenting a considerable asymmetry in tradeoff rates for increases and decreases in risk. An important implication for policy is that it is reasonable to use labor market estimates of VSL as a measure of the willingness to pay for additional safety. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Thomas Kniesner & W. Viscusi & James Ziliak, 2014. "Willingness to accept equals willingness to pay for labor market estimates of the value of a statistical life," Journal of Risk and Uncertainty, Springer, vol. 48(3), pages 187-205, June.
    • Handle: RePEc:kap:jrisku:v:48:y:2014:i:3:p:187-205
    DOI: 10.1007/s11166-014-9192-1
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    Citations

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    Cited by:

    1. Joni Hersch, 2018. "Valuing the risk of workplace sexual harassment," Journal of Risk and Uncertainty, Springer, vol. 57(2), pages 111-131, October.
    2. Thomas J. Kniesner & W. Kip Viscusi, 2023. "Compensating Differentials for Occupational Health and Safety Risks: Implications of Recent Evidence," Research in Labor Economics, in: 50th Celebratory Volume, volume 50, pages 83-116, Emerald Group Publishing Limited.
    3. Sunstein, Cass R., 2013. "The value of a statistical life: some clarifications and puzzles," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 4(2), pages 237-261, August.
    4. Louise B. Russell, 2014. "Do We Really Value Identified Lives More Highly Than Statistical Lives?," Medical Decision Making, , vol. 34(5), pages 556-559, July.
    5. W. Kip Viscusi, 2015. "The Role of Publication Selection Bias in Estimates of the Value of a Statistical Life," American Journal of Health Economics, University of Chicago Press, vol. 1(1), pages 27-52, Winter.
    6. Kip Viscusi, W. & Gayer, Ted, 2016. "Rational Benefit Assessment for an Irrational World: Toward a Behavioral Transfer Test1," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 7(1), pages 69-91, April.
    7. Tadahiro Okuyama, 2017. "A risk benefit calculation method based on consumer behavior and household risk production function," Economics Bulletin, AccessEcon, vol. 37(2), pages 645-652.
    8. Thomas J. Kniesner, 2019. "Behavioral economics and the value of a statistical life," Journal of Risk and Uncertainty, Springer, vol. 58(2), pages 207-217, June.
    9. Kiet T. Nguyen & Jack L. Knetsch & Phumsith Mahasuweerachai, 2021. "WTP or WTA: A Means of Determining the Appropriate Welfare Measure of Positive and Negative Changes When Preferences are Reference Dependent," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(4), pages 615-633, April.
    10. Agamoni Majumder & S. Madheswaran, 2017. "Compensating wage differential and value of statistical life: a meta-analysis," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 60(4), pages 527-548, December.
    11. St-Amour, Pascal, 2024. "Valuing life over the life cycle," Journal of Health Economics, Elsevier, vol. 93(C).
    12. Lisa A. Robinson & James K. Hammitt, 2016. "Valuing Reductions in Fatal Illness Risks: Implications of Recent Research," Health Economics, John Wiley & Sons, Ltd., vol. 25(8), pages 1039-1052, August.
    13. Castañeda Dower, Paul & Markevich, Andrei & Weber, Shlomo, 2021. "The value of a statistical life in a dictatorship: Evidence from Stalin," European Economic Review, Elsevier, vol. 133(C).
    14. W. Kip Viscusi & Clayton Masterman, 2017. "Anchoring biases in international estimates of the value of a statistical life," Journal of Risk and Uncertainty, Springer, vol. 54(2), pages 103-128, April.

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    More about this item

    Keywords

    Willingness to pay; Willingness to accept; Value of statistical life; VSL; CFOI; Panel data; I10; J17; J28; K00; C23;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)

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