A quantile estimation approach to identify income and age variation in the value of a statistical life
AbstractIn theory, heterogeneity in individual characteristics translates into variation in the marginal willingness to pay for a mortality risk reduction. Two dimensions of heterogeneity, with respect to income and age, have recently received attention due to their policy relevance. We propose a quantile regression approach to simultaneously explore these two sources of heterogeneity and their interactions within the context of the hedonic wage model, the most common revealed preference approach for obtaining value of statistical life estimates. We illustrate the approach using data from the Health and Retirement Study (HRS). We find that the impact of age on the wage-risk tradeoff varies across the wage distribution. This result indicates important interactions between age and income heterogeneity. Thus, the conventional mean hedonic wage regression, even when the mean effect is allowed to vary with age, masks important heterogeneity.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 59 (2010)
Issue (Month): 3 (May)
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Web page: http://www.elsevier.com/locate/inca/622870
Value of a statistical life Quantile regression Income elasticity;
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- W. Viscusi, 2010. "The heterogeneity of the value of statistical life: Introduction and overview," Journal of Risk and Uncertainty, Springer, vol. 40(1), pages 1-13, February.
- Hammitt, James K. & Robinson, Lisa A., 2011.
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Open Access publications from University of Toulouse 1 Capitole
http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Hammitt James K. & Robinson Lisa A, 2011. "The Income Elasticity of the Value per Statistical Life: Transferring Estimates between High and Low Income Populations," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(1), pages 1-29, January.
- Polat, Sezgin, 2013. "Wage Compensation for Risk: The Case of Turkey," GIAM Working Papers 13-11, Galatasaray University Economic Research Center.
- Shelby Gerking & Mark Dickie & Marcella Veronesi, 2012. "Valuation of Human Health: An Integrated Model of Willingness to Pay for Mortality and Morbidity Risk Reductions," NCEE Working Paper Series 201207, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Oct 2012.
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