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Valuing statistical lives from observations of speed limits and driving behavior

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  • Strand, Jon

    ()
    (Department of Economics)

Abstract

The 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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File URL: http://www.hero.uio.no/publicat/2003/HERO2003_21.pdf
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Bibliographic Info

Paper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2003:21.

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Length: 26 pages
Date of creation: 22 Jun 2009
Date of revision:
Handle: RePEc:hhs:oslohe:2003_021

Contact details of provider:
Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
Phone: 2307 5309
Fax: 2307 5310
Email:
Web page: http://www.hero.uio.no/eng.html
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Keywords: Value of a statistical life; VSL; driving;

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  1. Garen, John, 1988. "Compensating Wage Differentials and the Endogeneity of Job Riskiness," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 9-16, February.
  2. Parry, Ian W. H., 2004. "Comparing alternative policies to reduce traffic accidents," Journal of Urban Economics, Elsevier, vol. 56(2), pages 346-368, September.
  3. Richard Thaler & Sherwin Rosen, 1976. "The Value of Saving a Life: Evidence from the Labor Market," NBER Chapters, in: Household Production and Consumption, pages 265-302 National Bureau of Economic Research, Inc.
  4. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
  5. Johansson, Per-Olov, 2001. "Is there a meaningful definition of the value of a statistical life?," Journal of Health Economics, Elsevier, vol. 20(1), pages 131-139, January.
  6. Orley Ashenfelter & Michael Greenstone, 2002. "Using Mandated Speed Limits to Measure the Value of a Statistical Life," Working Papers 842, Princeton University, Department of Economics, Industrial Relations Section..
  7. Rosen, Sherwin, 1988. " The Value of Changes in Life Expectancy," Journal of Risk and Uncertainty, Springer, vol. 1(3), pages 285-304, September.
  8. Arianne de Blaeij & Raymond J.G.M. Florax & Piet Rietveld & Erik T. Verhoef, 2000. "The Value of Statistical Life in Road Safety: A Meta-Analysis," Tinbergen Institute Discussion Papers 00-089/3, Tinbergen Institute.
  9. Carlsen Arne J. & Strand Jon & Wenstop Fred, 1993. "Implicit Environmental Costs in Hydroelectric Development: An Analysis of the Norwegian Master Plan for Water Resources," Journal of Environmental Economics and Management, Elsevier, vol. 25(3), pages 201-211, November.
  10. Deacon, Robert T & Sonstelie, Jon, 1985. "Rationing by Waiting and the Value of Time: Results from a Natural Experiment," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 627-47, August.
  11. Glenn C. Blomquist, 2004. "Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy," Review of Economics of the Household, Springer, vol. 2(1), pages 89-110, 03.
  12. Jason F. Shogren & Tommy Stamland, 2002. "Skill and the Value of Life," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 1168-1197, October.
  13. Ghosh, Debapriya & Lees, Dennis & Seal, William, 1975. "Optimal Motorway Speed and Some Valuations of Time and Life," The Manchester School of Economic & Social Studies, University of Manchester, vol. 43(2), pages 134-43, June.
  14. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1912-46, December.
  15. Leigh J. Paul, 1995. "Compensating Wages, Value of a Statistical Life, and Inter-industry Differentials," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 83-97, January.
  16. Janusz R. Mrozek & Laura O. Taylor, 2002. "What determines the value of life? a meta-analysis," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(2), pages 253-270.
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