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The Value of Reduced Risk of Injury and Deaths in Pakistan—Using Actual and Perceived Risk Estimates

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Author Info

  • Muhammad Rafiq

    (Institute of Management Sciences, Peshawar)

  • Mir Kalan Shah

    (Institute of Development Studies, KPK Agricultural University Peshawar)

Abstract

This study has been designed to obtain the statistical value of life and health in Pakistan by examining the compensating wage differentials among the blue collar workers of the manufacturing sector in Lahore. So far, no estimates based on compensated wage models or contingent valuation method are available for the country. Our results are based on the one-to-one interviews of 680 workers. We have estimated at the VSL and the VSI based on actual and perceived measures. The study estimates the Value of Statistical Life (VSL) to be between $ 122,047 (10.4 million PKR) and $435,294 (37 million PKR) per statistical life. Moreover, the Value of Statistical Injury (VSI) is within a range of $417 (35,445 PKR) and $1654 (140,590) per statistical injury. These values are low as compared to the values of developed countries; however, our results are akin to the results of many studies conducted in several developing countries including India, South Korea, and Mexico. The variations in the results are due to the use of different risk measures, that is, actual and professed or perceived risk measures in alternative regression equations. The regression models are fully robust and do not suffer from any major econometric problem. The results of the study will facilitate different public and private sector agencies for a better approximation of the benefits of pollution reduction and other safety measures such as traffic safety and medical intercessions. It may also encourage further research in this area

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Bibliographic Info

Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 49 (2010)
Issue (Month): 4 ()
Pages: 823–837

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Handle: RePEc:pid:journl:v:49:y:2010:i:4:p:823-837

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Keywords: Compensating Wage Differentials; Lahore; Likert Scale;

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References

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  1. Craig A. Olson, 1981. "An Analysis of Wage Differentials Received by Workers on Dangerous Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 167-185.
  2. Bowland, Bradley J. & Beghin, John C., 2001. "Robust estimates of value of a statistical life for developing economies," Journal of Policy Modeling, Elsevier, vol. 23(4), pages 385-396, May.
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  7. 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.
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  9. Kim, Seung-Wook & Fishback, Price V, 1999. "The Impact of Institutional Change on Compensating Wage Differentials for Accident Risk: South Korea, 1984-1990," Journal of Risk and Uncertainty, Springer, vol. 18(3), pages 231-48, October.
  10. Gerking, Shelby & de Haan, Menno & Schulze, William, 1988. " The Marginal Value of Job Safety: A Contingent Valuation Study," Journal of Risk and Uncertainty, Springer, vol. 1(2), pages 185-99, June.
  11. Gerking, S.D. & Haan, M. de & Schulze, W.D., 1988. "The marginal value of job safety: A contingent valuation study," Open Access publications from Tilburg University urn:nbn:nl:ui:12-4742815, Tilburg University.
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