Risk Heterogeneity and the Value of Reducing Fatal Risks: Further Market-Based Evidence
The benefits associated with mortality risk reductions are a critical input for the benefit-cost analysis of economically significant federal regulations that affect health and safety. The dominant method of estimating the benefits of reducing mortality risks relies on labor markets to estimate the tradeoffs between workers wages and occupational risk. The past literature considers all labor market risks to be equivalent, failing to recognize the inherent heterogeneity in occupational hazards. In this research, heterogeneity in the value of reducing risks is explored within the labor market context. Unique location-specific risk data are developed for over 300 U.S. cities to separately identify the wage premiums for facing two disparate occupational risks: violent assault and motor vehicle accident risks. We find that ignoring the underlying heterogeneity in risks can lead to substantial over/under-statements of the benefits of reducing any one particular risk by up to 350%. As such, caution is urged for benefits transfer exercises that apply estimates of the marginal willingness to pay for reducing labor market accident risks to policies affecting very different risks, such as public safety or environmental risks.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 2 (2011)
Issue (Month): 3 (August)
|Contact details of provider:|| Web page: https://www.degruyter.com|
|Order Information:||Web: https://www.degruyter.com/view/j/jbca|
References listed on IDEAS
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.:
- Joseph E. Aldy & W. Kip Viscusi, 2008.
"Adjusting the Value of a Statistical Life for Age and Cohort Effects,"
The Review of Economics and Statistics,
MIT Press, vol. 90(3), pages 573-581, August.
- Aldy, Joseph E. & Viscusi, W. Kip, 2006. "Adjusting the Value of a Statistical Life for Age and Cohort Effects," Discussion Papers dp-06-19, Resources For the Future.
- Evans, Mary F. & Schaur, Georg, 2010. "A quantile estimation approach to identify income and age variation in the value of a statistical life," Journal of Environmental Economics and Management, Elsevier, vol. 59(3), pages 260-270, May.
- Fredrik Carlsson & Olof Johansson-Stenman & Peter Martinsson, 2004. "Is Transport Safety More Valuable in the Air?," Journal of Risk and Uncertainty, Springer, vol. 28(2), pages 147-163, March.
- Christopher R. Bollinger & Barry T. Hirsch, 2006. "Match Bias from Earnings Imputation in the Current Population Survey: The Case of Imperfect Matching," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 483-520, July.
- Bollinger, Christopher R. & Hirsch, Barry, 2005. "Match Bias from Earnings Imputation in the Current Population Survey: The Case of Imperfect Matching," IZA Discussion Papers 1846, Institute for the Study of Labor (IZA).
- Scotton, Carol R. & Taylor, Laura O., 2011. "Valuing risk reductions: Incorporating risk heterogeneity into a revealed preference framework," Resource and Energy Economics, Elsevier, vol. 33(2), pages 381-397, May.
- 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.
- 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.
- Dan A. Black & Thomas K. Kniesner, 2003. "On the Measurement of Job Risk in Hedonic Wage Models," NCEE Working Paper Series 200306, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2003.
- Mary Evans & V. Smith, 2010. "Measuring how risk tradeoffs adjust with income," Journal of Risk and Uncertainty, Springer, vol. 40(1), pages 33-55, February.
- Mary F. Evans & V. Kerry Smith, 2009. "Measuring How Risk Tradeoffs Adjust With Income," NBER Working Papers 15372, National Bureau of Economic Research, Inc.
- Savage, Ian, 1993. "An Empirical Investigation into the Effect of Psychological Perceptions on the Willingness-to-Pay to Reduce Risk," Journal of Risk and Uncertainty, Springer, vol. 6(1), pages 75-90, January.
- Thomas Kniesner & W. Viscusi & James Ziliak, 2010. "Policy relevant heterogeneity in the value of statistical life: New evidence from panel data quantile regressions," Journal of Risk and Uncertainty, Springer, vol. 40(1), pages 15-31, February.
- Kniesner, Thomas J. & Viscusi, W. Kip & Ziliak, James P., 2009. "Policy Relevant Heterogeneity in the Value of Statistical Life: New Evidence from Panel Data Quantile Regressions," IZA Discussion Papers 4508, Institute for the Study of Labor (IZA).
- Thomas J. Kniesner & W. Kip Viscusi & James P. Ziliak, 2009. "Policy Relevant Heterogeneity in the Value of Statistical Life: New Evidence from Panel Data Quantile Regressions," Center for Policy Research Working Papers 118, Center for Policy Research, Maxwell School, Syracuse University.
- 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.
- Sunstein, Cass R, 1997. "Bad Deaths," Journal of Risk and Uncertainty, Springer, vol. 14(3), pages 259-282, May-June.
- 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.
- Benjamin, Daniel K & Dougan, William R & Buschena, David, 2001. "Individuals' Estimates of the Risks of Death: Part II--New Evidence," Journal of Risk and Uncertainty, Springer, vol. 22(1), pages 35-57, January.
- Cookson, Richard, 2000. "Incorporating psycho-social considerations into health valuation: an experimental study," Journal of Health Economics, Elsevier, vol. 19(3), pages 369-401, May.
- Hammitt, James K & Graham, John D, 1999. "Willingness to Pay for Health Protection: Inadequate Sensitivity to Probability?," Journal of Risk and Uncertainty, Springer, vol. 18(1), pages 33-62, April.
- Trudy Ann Cameron, 2010. "Euthanizing the Value of a Statistical Life," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 161-178, Summer.
- James Hammitt & Kevin Haninger, 2010. "Valuing fatal risks to children and adults: Effects of disease, latency, and risk aversion," Journal of Risk and Uncertainty, Springer, vol. 40(1), pages 57-83, February.
- Susan Chilton & Michael Jones-Lee & Francis Kiraly & Hugh Metcalf & Wei Pang, 2006. "Dread risks," Journal of Risk and Uncertainty, Springer, vol. 33(3), pages 165-182, December.
- Ikuho Kochi & Bryan Hubbell & Randall Kramer, 2006. "An Empirical Bayes Approach to Combining and Comparing Estimates of the Value of a Statistical Life for Environmental Policy Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(3), pages 385-406, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:bpj:jbcacn:v:2:y:2011:i:3:n:1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.