The Value of a Statistical Life and the Coefficient of Relative Risk Aversion

Individuals’ risk preferences are estimated and employed in a variety of settings, notably including choices in financial, labor, and product markets. Recent work, especially in financial economics, provides estimates of individuals’ coefficients of relative risk aversion (R’s) in excess of one, and often significantly higher. However, it can be shown that high R’s imply equally high values for the income elasticity of the value of a statistical life. Yet estimates of this elasticity, derived from labor and product markets, are in the range of 0.5 to 0.6. Furthermore, it turns out that even an R below one is difficult to reconcile with these elasticity estimates. Thus, there appears to be an important (additional) anomaly involving individuals’ risk-taking behavior in different market settings.JEL Classification: D80, G11, G12, I10, J17     

The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World

A substantial literature over the past thirty years has evaluated tradeoffs between money and fatality risks. These values in turn serve as estimates of the value of a statistical life. This article reviews more than 60 studies of mortality risk premiums from ten countries and approximately 40 studies that present estimates of injury risk premiums. This critical review examines a variety of econometric issues, the role of unionization in risk premiums, and the effects of age on the value of a statistical life. Our meta-analysis indicates an income elasticity of the value of a statistical life from about 0.5 to 0.6. The paper also presents a detailed discussion of policy applications of these value of a statistical life estimates and related issues, including risk-risk analysis.     

The economics of the nonprofit sector: Insights from the institutionalism of John R. Commons

While modern nonprofit economics is dominated by the neoclassical and new institutional economic paradigms, this paper develops an economic explanation of the nonprofit sector from the perspective of the original institutionalism of John R. Commons. Instead of focusing on the neoclassical conception of market optimality, John R. Commons’ theory of reasonable value draws attention to the nonprofit sector's role in attaining a reasonable quality of community life. In contrast to the new institutional economics conception of the superiority of full private property rights, John R. Commons’ theory of scarcity, efficiency, and transactions shows the specific property rights structure of the nonprofit organizational form to be well-suited for precisely that purpose. This argument is illustrated on the example of agricultural and rural nonprofit organizations, which make an important contribution to attaining a more reasonable quality of community life in rural areas worldwide.     

Age, Health and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario Residents

We present the results of a contingent valuation survey eliciting willingness to pay (WTP) for mortality risk reductions. The survey was self-administered using a computer by 930 persons in Hamilton Ontario aged 40 to 75. Visual and audio aides were used to enhance risk comprehension. Mean WTP figures for a contemporaneous risk reduction imply a value of a statistical life of approximately C$l.2 to C$3.8 million (1999 C$). Mean WTP is constant with age up to 70 years, and is about 30 percent lower for persons aged 70 and older. WTP is unaffected by physical health status, but is affected by mental health.     

The Benefits of Reducing Gun Violence: Evidence from Contingent-Valuation Survey Data

This article presents an estimate of the benefits of reducing crime using the contingent-valuation (CV) method. We focus on gun violence, a crime of growing policy concern in America. Our data come from a national survey in which we ask respondents referendum-type questions that elicit their willingness-to-pay (WTP) to reduce gun violence by 30%. We estimate that the public's WTP to reduce gun assaults by 30% equals $24.5 billion, or around $1.2 million per injury. Our estimate implies a statistical value of life that is quite consistent with those derived from other methods.     

商品社会使用价值与市场价格规律论

现代经济理论的两大体系 ,都对价格的有关理论做出了说明。有一种说法 ,把马克思主义经济学的劳动价值论与当代西方主流经济学派的供求论综合起来 ,就应当可以得到较为完美的价格理论。但这是不可能的。解决问题的出路 ,只能是按马克思主义经济学的内在逻辑 ,深入研究商品的使用价值 ,通过商品价值和使用价值对商品价格做出完整的说明 ,同时破解在供求与价值决定上的相互循环论证 ,发展以劳动价值为基础的价格理论。商品的使用价值 ,具有自然使用价值和社会使用价值两重属性。商品的社会使用价值深刻地反映着商品交换的经济关系 ,由自然使用价值等一系列因素决定。商品社会使用价值 ,在量上最终表现为某一商品的社会需求量与生产供给量的比率 ,在不同的条件下具有不同的值。商品的市场价格 ,由商品价值或其转化形式与商品社会使用价值共同决定。社会使用价值比价值或其转化形式更复杂、更多样、更易变 ,是市场价格变化的主导因素。社会使用价值为 1的市场价格 ,即是市场均衡价格。所谓市场价格围绕商品价值或其转化形式上下波动 ,实质上应是围绕市场均衡价格上下波动。调节市场供求关系的根本因素 ,表面上看是商品价格 ,而实质上是市场供求的相互作用。     

试论劳动价值论的适用范围

劳动价值论在解释现实经济现象时存在一定的困难 ,不是劳动价值论自身逻辑和体系问题 ,而是劳动价值论所研究的价值理论与价格理论、分配理论有联系也有区别 ,劳动价值论有其自身的适用范围 ,必须科学界定劳动价值论的适用范围 ,从历史唯物主义和经济学的角度重新认识劳动价值论的科学性和伟大意义     

Uncertainty with Partial Information on the Possibility of the Events

The Choquet expected utility model deals with nonadditive probabilities (or capacities). Their dependence on the information the decision-maker has about the possibility of the events is taken into account. Two kinds of information are examined: interval information (for instance, the percentage of white balls in an urn is between 60% and 100%) and comparative information (for instance, the information that there are more white balls than black ones). Some implications are shown with regard to the core of the capacity and to two additive measures which can be derived from capacities: the Shapley value and the nucleolus. Interval information bounds prove to be satisfied by all probabilities in the core, but they are not necessarily satisfied by the nucleolus (when the core is empty) and the Shapley value. We must introduce the constrained nucleolus in order for these bounds to be satisfied, while the Shapley value does not seem to be adjustable. On the contrary, comparative information inequalities prove to be not necessarily satisfied by all probabilities in the core and we must introduce the constrained core in order for these inequalities be satisfied. However, both the nucleolus and the Shapley value satisfy the comparative information inequalities, and the Shapley value does it more strictly than the nucleolus. This revised version was published online in June 2006 with corrections to the Cover Date.     

Living Healthy and Living Long: Valuing the Nonpecuniary Loss from Disability and Death

This analysis uses three valuation approaches—risk–risk tradeoff, paired risk–dollar comparison, and utility function estimation—to estimate the nonpecuniary cost associated with disability in late life. In addition, we obtain an estimate of the value of life using a paired risk–dollar comparison. The data were obtained from interviews with 548 persons using an iterative computerized questionnaire. Respondents reported a median value of life of $12 million. They were willing-to-pay .7–1.4 million to avoid disability in late life or approximately $47–$95 thousand for each year of disability over age 62. The results were robust to the valuation technique employed.     

Self Selection Bias in the Estimates of Compensating Differentials for Job Risks in India

This study contributes to the hedonic wage literature in developing countries by estimating the collective willingness to pay of a statistical life/injury, using an original data set from the Indian labor market. As self-selection by workers results in biased estimates of the wage premium for job risks, the study uses a modified selectivity bias correction technique. Empirical results indicate substantial heterogeneity in returns to risk. The estimated value of life without selectivity bias is Rs. 56 million (US $3 million), which is substantially larger than the value with selection bias. The estimates provided by the study can aid policy makers, international agencies and other researchers in evaluating health projects in India and other developing countries.     

The value of a statistical life: A comparison of two approaches

Using an original data set, this article presents the first effort to compare systematically the values of a statistical life obtained from the two main methodologies existing in the literature—the revealed-preference approach (wage-risk analysis) and the contingent-valuation approach—applied to the same sample of individuals. A survey was conducted in the Montreal area with a questionnaire containing two series of questions: one set of contingent-valuation questions and one set of questions pertaining to the information necessary for performing a wage-risk study. The results show that the values of a statistical life obtained from each method are different from each other.This research was supported by the Fonds F.C.A.R. of the Quebec government, the Social Sciences and Humanities Research Council, and by the Fondation Mercure of l'École des Hautes Études Commerciales. The authors want to thank the editor and an anonymous referee for their useful comments.     

论价值的本质--兼论商品价值量的决定因素

价值是马克思主义经济学的一个重要范畴,然而对价值本质的研究却一直没达到应有的深度。价值本质上是劳动资源的合理配置,是按比例分配劳动时间规律在商品经济中采取的特殊形式。深刻理解这一点,有助于对两种涵义的社会必要劳动时间在商品价值决定中的地位形成正确的认识,有利于促进社会主义市场经济体制的完善。     

Background Risks and the Value of a Statistical Life

We examine the effects of background mortality and financial risks on an individual's willingness to pay to reduce his mortality risk (the value of statistical life or VSL). Under reasonable assumptions about risk aversion and prudence with respect to wealth in the event of survival and with respect to bequests in the event of death, background mortality and financial risks decrease VSL. The effects of large mortality or financial risks on VSL can be substantial, but the effects of small background risks are negligible. These results suggest that the commonplace failure to account for background risk in evaluating VSL is unlikely to produce substantial bias in most applications.     

On the Value of Changes in Life Expectancy: Blips Versus Parametric Changes

We estimate the value of a ‘blip’, i.e. an immediate small reduction, in the hazard rate for a random sample of Swedes. Since the risk reduction is age-independent (2 ‘extra saved lives’ out of 10,000 during the next year), we can examine how the value of a statistical life varies with age. We also show how blip data can be used to obtain a lower bound for the value of a permanent change in an individual's hazard rate. The value of a life exhibits an inverted-U shape with respect to age, peaking at the age of 40, and lies within the $3 to $7 million interval where most reasonable estimates are clustered according to Viscusi's (1992) survey.     

The Value of a Statistical Life in Transport: Findings from a New Contingent Valuation Study in Sweden

This article presents the results of a contingent valuation study from Sweden aimed at estimating the value of a statistical life (VOSL) in road traffic safety. Data on respondents' own subjective risk was collected by use of visual aids presented in a mail questionnaire. The relationship between willingness-to-pay (WTP) and absolute risk reduction was estimated by using a non-linear, least absolute deviation estimation method. This study generated an income-adjusted VOSL of SEK22.3 million (US$2.6 million). Analysis of WTP's sensitivity to probability variation indicates that in future studies, valuing risk reductions in road traffic, the magnitude of absolute risk and relative risk reductions to consider should be in perceptible range. On addition it should also be possible for respondents to compare the magnitudes of different risk reductions.     

Behavioral economics and the value of a statistical life

Journal of Risk and Uncertainty - There are many possible connections between the value of statistical life (VSL) and behavioral economics. A list of topics includes endowment effects, risk...     

价值哲学研究的基本范式及其效用

价值哲学是以生活世界中的价值问题为研究对象的 ,因之从学科定位和学科使命来说 ,价值哲学应是社会哲学的或实践论的 ,而不是形而上的纯哲学理论。它原本不以建构形式上严密的逻辑体系为己任 ,而以在对社会生活中重大价值问题进行缜密研究基础上给出正确的价值理念为使命。但价值哲学用以把握价值问题的方式却又是反思的和批判的 ,借以完成此任的有效途径只能是基本原则的设定和范畴体系的设置。价值哲学的学科定位和学科使命决定了价值哲学研究的两种基本范式 :抽象化的即本体论的和认识论的途径 ;现实化的即社会哲学的和实践论的途径。本体论的研究范式保证了价值问题研究的彻底性 ,社会哲学的研究范式保证了价值问题研究的现实性。价值哲学之两种研究范式及其关联决定了 ,它首先要确立一种问题意识 ,然后把社会结构及其变迁作为实践基础 ,视创价与代价为分析框架 ,以供给一定的价值理念为学科使命。只有这样 ,价值哲学才能做到逻辑与历史的一致、理论与实践的结合、科学性与规范性的统一。     

新时代谈“价值论”——兼评“劳动价值论”

经济科学的两大学派———以亚当·斯密为代表的市场经济学派与以马克思为代表的政治经济学派 ,各有自己的价值论。这两种不同的价值论有一个根本区别 :前者是为市场交换制定一套规则 ,后者是为“剥夺剥夺者”的政治目标奠定理论依据。市场交换日益国际化 ,只能实行一种公认的市场规则 ;中国加入WTO后 ,也必然要遵守国际交换规则。与此相适应 ,理论上也要承认多种生产要素参与价值形成和参与分配。     

On the Measurement of Job Risk in Hedonic Wage Models

We examine the incidence, form, and research consequences of measurement error in measures of fatal injury risk in U.S. workplaces using both Bureau of Labor Statistics and National Intitute of Occupational Safety and Health data. Of the various measures examined the NIOSH industry risk measure produces implicit value of life estimates most in line with both economic theory and the mode result for the existing literature. Because we find non-classical measurement error that differs across risk measures and is not independent of other regressors, innovative statistical procedures need be applied to obtain statistically improved estimates of wage-fatality risk tradeoffs.     

Racial Differences in Labor Market Values of a Statistical Life

This article constructs measures of job fatality rates for black and white workers using information on job-related fatalities from 1992–1997. The fatality rates for black employees are somewhat greater than those for whites. Each of these groups receives significant compensating wage differentials for fatality risks, controlling for nonfatal risks and expected workers' compensation benefits. The implicit value of a statistical life is lower for black workers than for whites. These results in conjunction with evidence that blacks receive less annual compensation for fatality risks than do whites imply that black and white workers face different market offer curves that are flatter for blacks than for whites.