The value of a statistical life (VSL) is an important tool for cost-benefit analysis of regulatory policies that concern fatality risks. Its proponents claim that it measures people's risk preferences, and that VSL therefore is a tool of vicarious governance. This paper criticizes the revealed preference method for measuring VSL. It specifies three minimal conditions for vicarious governance: sensitivity, fairness and hypothetical compromise, and shows that the VSL measure, in its common application in policy formation and analysis, violates these conditions. It therefore concludes that the revealed preference VSL measure, in its current form, is not a tool of vicarious governance.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.