On the Measurement of Job Risk in Hedonic Wage Models
AbstractWe examine the incidence, form, and research consequences of measurement error in measures of fatal injury risk in U.S. workplaces using both BLS and NIOSH data. These data are commonly used in hedonic wage studies. Despite the fact that each of our measures of job risk purport to measure the same thing – the risk of a fatality while on the job – the various measures of job risk are not highly correlated, with the maximum correlation being 0.53. Indeed, many of the estimated value of statistical life estimates are negative. We find that the National Institute of Safety and Health’s industry risk measure produces implicit value of life estimates most in line with both economic theory and the mode result for the existing literature than other risk measures examined. Because we find non-classical measurement error that differs across risk measures and is not independent of other regressors, innovative statistical procedures need be applied to obtain statistically improved estimates of wage-fatality risk tradeoffs.
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Bibliographic InfoPaper provided by National Center for Environmental Economics, U.S. Environmental Protection Agency in its series NCEE Working Paper Series with number 200306.
Length: 28 pages
Date of creation: Aug 2003
Date of revision: Aug 2003
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hedonic wage equation; price of risk; implicit value of life; measurement error;
Other versions of this item:
- Black, Dan A & Kniesner, Thomas J, 2003. " On the Measurement of Job Risk in Hedonic Wage Models," Journal of Risk and Uncertainty, Springer, vol. 27(3), pages 205-20, December.
- Dan A. Black & Thomas J. Kniesner, 2003. "On the Measurement of Job Risk in Hedonic Wage Models," Center for Policy Research Working Papers 49, Center for Policy Research, Maxwell School, Syracuse University.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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