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A Tale of the Tails: The Value of a Statistical Life at the Tails of the Age Distribution

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Listed:
  • Kniesner, Thomas J.

    (Claremont Graduate University)

  • Viscusi, W. Kip

    (Vanderbilt University)

Abstract

The considerable literature on the value of a statistical life (VSL) documents the wage-mortality risk tradeoffs for the working population. Regulatory analyses often must monetize risks to populations at the tails of the age distribution. Because of the longer life expectancy for children, there have been proposals to add a premium to their VSL, which would generate an inconsistency with revealed preference estimates of the VSL trajectory over the life cycle. The shorter life expectancy among older people has led to various arbitrary senior discounts for seniors' life expectancy. Application of the value of a statistical life year (VSLY) can address valuation of small changes in life expectancy. Examples of inappropriate age adjustments that we discuss include practices by the Consumer Product Safety Commission and the Environmental Protection Agency.

Suggested Citation

  • Kniesner, Thomas J. & Viscusi, W. Kip, 2024. "A Tale of the Tails: The Value of a Statistical Life at the Tails of the Age Distribution," IZA Discussion Papers 16867, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16867
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    References listed on IDEAS

    as
    1. Thomas J. Kniesner & W. Kip Viscusi, 2023. "Compensating Differentials for Occupational Health and Safety Risks: Implications of Recent Evidence," Research in Labor Economics, in: 50th Celebratory Volume, volume 50, pages 83-116, Emerald Group Publishing Limited.
    2. Robin R. Jenkins & Nicole Owens & Lanelle Bembenek Wiggins, 2001. "Valuing Reduced Risks To Children: The Case Of Bicycle Safety Helmets," Contemporary Economic Policy, Western Economic Association International, vol. 19(4), pages 397-408, October.
    3. Gerking, Shelby & Dickie, Mark & Veronesi, Marcella, 2014. "Valuation of human health: An integrated model of willingness to pay for mortality and morbidity risk reductions," Journal of Environmental Economics and Management, Elsevier, vol. 68(1), pages 20-45.
    4. St-Amour, Pascal, 2024. "Valuing life over the life cycle," Journal of Health Economics, Elsevier, vol. 93(C).
    5. Hammitt, James K. & Tuncel, Tuba, 2023. "Monetary values of increasing life expectancy: sensitivity to shifts of the survival curve," TSE Working Papers 23-1416, Toulouse School of Economics (TSE).
    6. Kniesner, Thomas J. & Viscusi, W. Kip, 2023. "Promoting Equity through Equitable Risk Tradeoffs," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 14(1), pages 8-34, March.
    7. Thomas J. Kniesner & W. Kip Viscusi & Christopher Woock & James P. Ziliak, 2012. "The Value of a Statistical Life: Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 74-87, February.
    8. Aiken, Deborah V., 2019. "When Benefit-Cost Analysis Becomes Optional: Regulatory Analysis at the Consumer Product Safety Commission in the CPSIA Era," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 10(3), pages 404-433, October.
    9. Sunstein, Cass R., 2019. "Rear Visibility and Some Unresolved Problems for Economic Analysis (With Notes on Experience Goods)," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 10(3), pages 317-350, October.
    10. Blomquist, Glenn C. & Dickie, Mark & O'Conor, Richard M., 2011. "Willingness to pay for improving fatality risks and asthma symptoms: Values for children and adults of all ages," Resource and Energy Economics, Elsevier, vol. 33(2), pages 410-425, May.
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    More about this item

    Keywords

    circular A-4; Value of a Statistical Life; age; children; elderly; Value of a Statistical Life Year; VSL; VSLY;
    All these keywords.

    JEL classification:

    • 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
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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