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Measuring the Value of a Statistical Life: Problems and Prospects

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  • Orley Ashenfelter

    (Princeton University)

Abstract

Tradeoffs between monetary wealth and fatal safety risks are summarized in the value of a statistical life (VSL), a measure that is widely used for the evaluation of public policies in medicine, the environment, and transportation safety. This paper demonstrates the widespread use of this concept and summarizes the major issues, both theoretical and empirical, that must be confronted in order to provide a credible estimate of a VSL. The paper concludes with an application of these issues to a particular study of speed limits and highway safety.

Suggested Citation

  • Orley Ashenfelter, 2005. "Measuring the Value of a Statistical Life: Problems and Prospects," Working Papers 884, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:505
    as

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    References listed on IDEAS

    as
    1. Hersch, Joni, 1998. "Compensating Differentials for Gender-Specific Job Injury Risks," American Economic Review, American Economic Association, vol. 88(3), pages 598-627, June.
    2. 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, March.
    3. 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 205-220, December.
    4. 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.
    5. Orley Ashenfelter & Michael Greenstone, 2004. "Using Mandated Speed Limits to Measure the Value of a Statistical Life," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 226-267, February.
    6. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    7. Milton C. Weinstein, 2005. "Spending Health Care Dollars Wisely: Can Cost-Effectiveness Analysis Help? 16th Annual Herbert Lourie Memorial Lecture on Health Policy," Center for Policy Research Policy Briefs 30, Center for Policy Research, Maxwell School, Syracuse University.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Value of a statistical life; speed limits; value of time; safety risk;
    All these keywords.

    JEL classification:

    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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