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The Value of Statistical Life for Seniors

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Listed:
  • Jonathan D. Ketcham
  • Nicolai V. Kuminoff
  • Nirman Saha

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.

Suggested Citation

  • Jonathan D. Ketcham & Nicolai V. Kuminoff & Nirman Saha, 2024. "The Value of Statistical Life for Seniors," NBER Working Papers 33165, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33165
    Note: EEE PE
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    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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