On the definition and estimation of the value of a ?statistical life?
AbstractThe presentation will discuss the economic meaning of the concept of the Value of a Statistical Life (VSL) and review some of its properties. In particular, the age pattern of the VSL is considered. The presentation will also review recent estimates of the magnitude of a VSL taken from different countries and cultures. The value of preventing a fatality or (saving) a statistical life is an important question in health economics as well as environmental economics. This paper reviews several of the issues discussed in the literature. For example, how do we define the value of a (statistical) life? Are there really strong theoretical reasons for believing that the value of a life declines with age? The paper derives definitions of the value of a statistical life in both single-period models and life-cycle models. Models with and without actuarially fair annuities are examined, as well as the age-profile of the value of a statistical life
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano in its series Departmental Working Papers with number 2006-23.
Date of creation: 13 Oct 2006
Date of revision:
Value of a statistical life; value of preventing a fatality; age-specific values; willingness to pay;
Find related papers by JEL classification:
- I10 - Health, Education, and Welfare - - Health - - - General
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-10-28 (All new papers)
- NEP-HEA-2006-10-28 (Health Economics)
- NEP-IAS-2006-10-28 (Insurance Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Leung, Siu Fai, 1994.
"Uncertain Lifetime, the Theory of the Consumer, and the Life Cycle Hypothesis,"
Econometric Society, vol. 62(5), pages 1233-39, September.
- Leung, S.F., 1992. "Uncertain Lifetime, the Theory of the Consumer, and the Life Cycle Hypothesis," RCER Working Papers 323, University of Rochester - Center for Economic Research (RCER).
- Léonard,Daniel & Long,Ngo van, 1992.
"Optimal Control Theory and Static Optimization in Economics,"
Cambridge University Press, number 9780521337465, November.
- Léonard,Daniel & Long,Ngo van, 1992. "Optimal Control Theory and Static Optimization in Economics," Cambridge Books, Cambridge University Press, number 9780521331586, November.
- Kniesner Thomas J & Viscusi W. Kip & Ziliak James P, 2006.
"Life-Cycle Consumption and the Age-Adjusted Value of Life,"
The B.E. Journal of Economic Analysis & Policy,
De Gruyter, vol. 5(1), pages 1-36, January.
- Thomas J. Kniesner & James P. Ziliak & W. Kip Viscusi, 2004. "Life-Cycle Consumption and the Age-Adjusted Value of Life," NBER Working Papers 10266, National Bureau of Economic Research, Inc.
- Cairns, John, 2006. "Developments in discounting: With special reference to future health events," Resource and Energy Economics, Elsevier, vol. 28(3), pages 282-297, August.
- Blomqvist, Ake, 2002. "Defining the value of a statistical life: a comment," Journal of Health Economics, Elsevier, vol. 21(1), pages 169-175, January.
- Jones-Lee, Michael W, 1974. "The Value of Changes in the Probability of Death or Injury," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 835-49, July/Aug..
- Johannesson, Magnus & Johansson, Per-Olov & Löfgren, Karl-Gustaf, 1997.
"On the Value of Changes in Life Expectancy: Blips versus Parametric Changes,"
Working Paper Series in Economics and Finance
152, Stockholm School of Economics.
- Johannesson, Magnus & Johansson, Per-Olov & Lofgren, Karl-Gustaf, 1997. "On the Value of Changes in Life Expectancy: Blips versus Parametric Changes," Journal of Risk and Uncertainty, Springer, vol. 15(3), pages 221-39, December.
- Olivier J. Blanchard, 1984.
"Debt, Deficits and Finite Horizons,"
NBER Working Papers
1389, National Bureau of Economic Research, Inc.
- Strand, Jon, 2006. "Valuation of environmental improvements in continuous time with mortality and morbidity effects," Resource and Energy Economics, Elsevier, vol. 28(3), pages 229-241, August.
- Sherwin Rosen, .
"The Value of Changes in Life Expectancy,"
University of Chicago - Population Research Center
87-14, Chicago - Population Research Center.
- Chang, Fwu-Ranq, 1991. "Uncertain Lifetimes, Retirement and Economic Welfare," Economica, London School of Economics and Political Science, vol. 58(230), pages 215-32, May.
- 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.
- Caputo, Michael R., 1990. "How to do comparative dynamics on the back of an envelope in optimal control theory," Journal of Economic Dynamics and Control, Elsevier, vol. 14(3-4), pages 655-683, October.
- 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.
- LaFrance, Jeffrey T. & Barney, L. Dwayne, 1991. "The envelope theorem in dynamic optimization," Journal of Economic Dynamics and Control, Elsevier, vol. 15(2), pages 355-385, April.
- Mishan, E J, 1971. "Evaluation of Life and Limb: A Theoretical Approach," Journal of Political Economy, University of Chicago Press, vol. 79(4), pages 687-705, July-Aug..
- Jones-Lee, M W & Hammerton, M & Philips, P R, 1985. "The Value of Safety: Results of a National Sample Survey," Economic Journal, Royal Economic Society, vol. 95(377), pages 49-72, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (DEMM Working Papers).
If references are entirely missing, you can add them using this form.