IDEAS home Printed from https://ideas.repec.org/a/prg/jnlpol/v2010y2010i5id753p657-674.html
   My bibliography  Save this article

Hodnocení smrtelných rizik na trhu práce: studie hedonické mzdy v ČR
[The Valuation of Risks in the Labor Market: Hedonic Wage Study in CR]

Author

Listed:
  • Jan Melichar
  • Milan Ščasný
  • Jan Urban

Abstract

This study investigates the relationship between wages and risks of work-related fatalities in the Czech labour market. To prove this relationship, we followed the theory of compensating wage differentials and the theory of hedonic prices. Using data from 2007 Czech labour survey, we econometrically derived three hedonic wage functions. To estimate mortality risks premiums, two of hedonic wage functions used objective measures of fatality risk, one subjectively perceived risk. We found a positive and statistically significant correlation between wages and occupational fatality risks in all three models. The estimated effect was lower for hedonic function with worker's perception of mortality risks. This result implies the workers themselves underestimate the fatality risks that they are exposed. Based on estimated hedonic wage functions, we computed the value of a statistical life (VSL) which indicates the marginal rate of substitution between compensation and mortality risk. The implied value of VSL is 60 million CZK for the model with subjectively perceived risks and 266 million CZK for the models with objective risks in 2009 Czech crowns.

Suggested Citation

  • Jan Melichar & Milan Ščasný & Jan Urban, 2010. "Hodnocení smrtelných rizik na trhu práce: studie hedonické mzdy v ČR [The Valuation of Risks in the Labor Market: Hedonic Wage Study in CR]," Politická ekonomie, Prague University of Economics and Business, vol. 2010(5), pages 657-674.
  • Handle: RePEc:prg:jnlpol:v:2010:y:2010:i:5:id:753:p:657-674
    DOI: 10.18267/j.polek.753
    as

    Download full text from publisher

    File URL: http://polek.vse.cz/doi/10.18267/j.polek.753.html
    Download Restriction: free of charge

    File URL: http://polek.vse.cz/doi/10.18267/j.polek.753.pdf
    Download Restriction: free of charge

    File URL: https://libkey.io/10.18267/j.polek.753?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    2. Marek Giergiczny, 2008. "Value of a Statistical Life—the Case of Poland," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(2), pages 209-221, October.
    3. K. K. Lancaster, 2010. "A New Approach to Consumer Theory," Levine's Working Paper Archive 1385, David K. Levine.
    4. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    5. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    6. repec:reg:rpubli:282 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hana Švejdarová & Eva Cudlínová, 2013. "Economic Value of Cultural Landscape, Non-Production Services of a Territory, and Non-Market Valuation Methods. A Survey Focused on Determining which Landscape Functions are Valuated Most Frequently a," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2013(5), pages 64-81.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Veisten, Knut, 2007. "Contingent valuation controversies: Philosophic debates about economic theory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(2), pages 204-232, April.
    2. James J. Heckman & Rosa Matzkin & Lars Nesheim, 2003. "Simulation and Estimation of Nonaddative Hedonic Models," NBER Working Papers 9895, National Bureau of Economic Research, Inc.
    3. FADIJI, Damilare & OKOJI, Luke & AKERELE, Dare, 2021. "Quality Of Life For Occupational Risks Of Cocoa Farm Workers In Nigeria," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 24(1), March.
    4. Tiwari, Piyush & Parikh, Jyoti, 1997. "Demand for housing in the Bombay Metropolitan Region," Journal of Policy Modeling, Elsevier, vol. 19(3), pages 295-321, June.
    5. Henrik Andersson, 2005. "The Value of Safety as Revealed in the Swedish Car Market: An Application of the Hedonic Pricing Approach," Journal of Risk and Uncertainty, Springer, vol. 30(3), pages 211-239, May.
    6. Lall, Somik V. & Lundberg, Mattias, 2008. "What are public services worth, and to whom? Non-parametric estimation of capitalization in Pune," Journal of Housing Economics, Elsevier, vol. 17(1), pages 34-64, March.
    7. Ng, Travis & Chong, Terence & Du, Xin, 2010. "The value of superstitions," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 293-309, June.
    8. Stefania Tonin & Margherita Turvani, 2011. "Environmental contamination and industrial real estate market: an application of hedonic price method in Italy," ERSA conference papers ersa10p511, European Regional Science Association.
    9. Kuminoff, Nicolai V. & Jarrah, Abdul Salam, 2010. "A new approach to computing hedonic equilibria and investigating the properties of locational sorting models," Journal of Urban Economics, Elsevier, vol. 67(3), pages 322-335, May.
    10. van Dam, Ynte K. & van Trijp, Hans C.M., 2011. "Cognitive and motivational structure of sustainability," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 726-741.
    11. Arguea, Nestor M. & Hsiao, Cheng, 2000. "Market Values of Environmental Amenities: A Latent Variable Approach," Journal of Housing Economics, Elsevier, vol. 9(1-2), pages 104-126, March.
    12. Ouardighi, Fouad El & Tapiero, Charles S., 1998. "Quality and the diffusion of innovations," European Journal of Operational Research, Elsevier, vol. 106(1), pages 31-38, April.
    13. Timothy K.M. Beatty, 2007. "Recovering the Shadow Value of Nutrients," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 52-62.
    14. Guillaume Gaulier & Séverine Haller, 2000. "The Convergence of Automobile Prices in the European Union: an Empirical Analysis for the Period 1993-1999," Working Papers 2000-14, CEPII research center.
    15. Ahmadi-Esfahani, Fredoun Z. & Stanmore, Roland G., 1997. "Export demand for attributes of Australian wheat in Asia and the Middle East," Food Policy, Elsevier, vol. 22(2), pages 145-154, April.
    16. Kuminoff, Nicolai V., 2009. "Decomposing the structural identification of non-market values," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 123-139, March.
    17. Daniel L. McFadden, 2013. "The New Science of Pleasure," NBER Working Papers 18687, National Bureau of Economic Research, Inc.
    18. Hill, Robert J. & Melser, Daniel & Syed, Iqbal, 2009. "Measuring a boom and bust: The Sydney housing market 2001-2006," Journal of Housing Economics, Elsevier, vol. 18(3), pages 193-205, September.
    19. Uri, Noel D. & Douglas Beach, E., 1997. "A note on quality differences and United States/Canadian wheat trade," Food Policy, Elsevier, vol. 22(4), pages 359-367, August.
    20. Shaw, John G., 1994. "Transit, Density, and Residential Satisfaction," University of California Transportation Center, Working Papers qt5xs0r6vz, University of California Transportation Center.

    More about this item

    Keywords

    labour market; compensating wage differential; hedonic wage function; mortality risk; risk perception; value of a statistical life;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect 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
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlpol:v:2010:y:2010:i:5:id:753:p:657-674. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.