Valuing statistical lives from observations of speed limits and driving behavior
AbstractThe paper discusses how to derive empirical estimates of the value of a statistical life (VSL) from observations of highway driving speeds, and from how such speeds are affected by speed limits and penalties for speeding. When drivers optimize with respect to driving speeds, we discuss three alternative approaches. The first two rely on constructing drivers’ utility functions, and the last on revealed government preferences similar to that used by Ashenfelter and Greenstone (2002) (A-G). The two last approaches are based on observations of changed driving speeds when speed limits and speeding penalties change. When drivers are law obedient and adhere to speed limits only the A-G approach can be used. Their approach is however unrealistic in putting overly great demand on government information about VSL, and in addition provides upwardly biased average VSL estimates.
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Bibliographic InfoPaper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2003:21.
Length: 26 pages
Date of creation: 22 Jun 2009
Date of revision:
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Value of a statistical life; VSL; driving;
Find related papers by JEL classification:
- J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
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