IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v49y2010i4p823-837.html
   My bibliography  Save this article

The Value of Reduced Risk of Injury and Deaths in Pakistan—Using Actual and Perceived Risk Estimates

Author

Listed:
  • Muhammad Rafiq

    (Institute of Management Sciences, Peshawar)

  • Mir Kalan Shah

    (Institute of Development Studies, KPK Agricultural University Peshawar)

Abstract

This study has been designed to obtain the statistical value of life and health in Pakistan by examining the compensating wage differentials among the blue collar workers of the manufacturing sector in Lahore. So far, no estimates based on compensated wage models or contingent valuation method are available for the country. Our results are based on the one-to-one interviews of 680 workers. We have estimated at the VSL and the VSI based on actual and perceived measures. The study estimates the Value of Statistical Life (VSL) to be between $ 122,047 (10.4 million PKR) and $435,294 (37 million PKR) per statistical life. Moreover, the Value of Statistical Injury (VSI) is within a range of $417 (35,445 PKR) and $1654 (140,590) per statistical injury. These values are low as compared to the values of developed countries; however, our results are akin to the results of many studies conducted in several developing countries including India, South Korea, and Mexico. The variations in the results are due to the use of different risk measures, that is, actual and professed or perceived risk measures in alternative regression equations. The regression models are fully robust and do not suffer from any major econometric problem. The results of the study will facilitate different public and private sector agencies for a better approximation of the benefits of pollution reduction and other safety measures such as traffic safety and medical intercessions. It may also encourage further research in this area

Suggested Citation

  • Muhammad Rafiq & Mir Kalan Shah, 2010. "The Value of Reduced Risk of Injury and Deaths in Pakistan—Using Actual and Perceived Risk Estimates," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 823-837.
    • Handle: RePEc:pid:journl:v:49:y:2010:i:4:p:823-837
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/2010/Volume4/823-837.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bowland, Bradley J. & Beghin, John C., 2001. "Robust estimates of value of a statistical life for developing economies," Journal of Policy Modeling, Elsevier, vol. 23(4), pages 385-396, May.
    2. Robert May, 2001. "Risk and uncertainty," Nature, Nature, vol. 411(6840), pages 891-891, June.
    3. Daniel S. Hamermesh, 1999. "Changing Inequality in Markets for Workplace Amenities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1085-1123.
    4. Krupnick, Alan & Alberini, Anna & Cropper, Maureen & Simon, Nathalie & O'Brien, Bernie & Goeree, Ron & Heintzelman, Martin, 2002. "Age, Health and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario Residents," Journal of Risk and Uncertainty, Springer, vol. 24(2), pages 161-186, March.
    5. Shanmugam, K R, 2001. "Self Selection Bias in the Estimates of Compensating Differentials for Job Risks in India," Journal of Risk and Uncertainty, Springer, vol. 22(3), pages 263-275, May.
    6. Craig A. Olson, 1981. "An Analysis of Wage Differentials Received by Workers on Dangerous Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 167-185.
    7. Joni Hersch & W. Kip Viscusi, 1990. "Cigarette Smoking, Seatbelt Use, and Differences in Wage-Risk Tradeoffs," Journal of Human Resources, University of Wisconsin Press, vol. 25(2), pages 202-227.
    8. Viscusi, W Kip, 1978. "Wealth Effects and Earnings Premiums for Job Hazards," The Review of Economics and Statistics, MIT Press, vol. 60(3), pages 408-416, August.
    9. World Bank, 2006. "Pakistan Strategic Country Environmental Assessment," World Bank Publications - Reports 33928, The World Bank Group.
    10. 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.
    11. Beat Hintermann & Anna Alberini & Anil Markandya, 2010. "Estimating the value of safety with labour market data: are the results trustworthy?," Applied Economics, Taylor & Francis Journals, vol. 42(9), pages 1085-1100.
    12. K. Shanmugam, 2000. "Valuations of Life and Injury Risks," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(4), pages 379-389, August.
    13. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    14. 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 221-239, December.
    15. Persson, Ulf & Norinder, Anna & Hjalte, Krister & Gralén, Katarina, 2001. "The Value of a Statistical Life in Transport: Findings from a New Contingent Valuation Study in Sweden," Journal of Risk and Uncertainty, Springer, vol. 23(2), pages 121-134, September.
    16. Gerking, Shelby & de Haan, Menno & Schulze, William, 1988. "The Marginal Value of Job Safety: A Contingent Valuation Study," Journal of Risk and Uncertainty, Springer, vol. 1(2), pages 185-199, June.
    17. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    18. Jin-Tan Liu & James K Hammitt, 1999. "Perceived risk and value of workplace safety in a developing country," Journal of Risk Research, Taylor & Francis Journals, vol. 2(3), pages 263-275, July.
    19. Kim, Seung-Wook & Fishback, Price V, 1999. "The Impact of Institutional Change on Compensating Wage Differentials for Accident Risk: South Korea, 1984-1990," Journal of Risk and Uncertainty, Springer, vol. 18(3), pages 231-248, October.
    20. Liu, Jin-Tan & Hammitt, James K. & Liu, Jin-Long, 1997. "Estimated hedonic wage function and value of life in a developing country," Economics Letters, Elsevier, vol. 57(3), pages 353-358, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ahmad Mujtaba Khan & Asma Hyder, 2017. "The Statistical Value of Injury Risk in Pakistan’s Construction and Manufacturing Sectors," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 22(1), pages 1-18, Jan-June.
    2. Sanam Khan & Faisal Jamil, 2021. "Income differentials in the police and taxation departments’ employees in Peshawar," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(5), pages 1815-1828, October.
    3. Weber, Shlomo & Castaneda Dower, Paul & Markevich, Andrei, 2018. "The Value of a Statistical Life in a Dictatorship: Evidence from Stalin," CEPR Discussion Papers 12814, C.E.P.R. Discussion Papers.
    4. W. Kip Viscusi & Clayton Masterman, 2017. "Anchoring biases in international estimates of the value of a statistical life," Journal of Risk and Uncertainty, Springer, vol. 54(2), pages 103-128, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    2. Maureen Cropper & James K. Hammitt & Lisa A. Robinson, 2011. "Valuing Mortality Risk Reductions: Progress and Challenges," Annual Review of Resource Economics, Annual Reviews, vol. 3(1), pages 313-336, October.
    3. James Hammitt & Jin-Tan Liu, 2004. "Effects of Disease Type and Latency on the Value of Mortality Risk," Journal of Risk and Uncertainty, Springer, vol. 28(1), pages 73-95, January.
    4. Courard-Hauri David & Lauer Stephen A., 2012. "Taking "All Men Are Created Equal" Seriously: Toward a Metric for the Intergroup Comparison of Utility Functions Through Life Values," Journal of Benefit-Cost Analysis, De Gruyter, vol. 3(3), pages 1-30, August.
    5. James K. Hammitt & María Eugenia Ibarrarán, 2006. "The economic value of fatal and non‐fatal occupational risks in Mexico City using actuarial‐ and perceived‐risk estimates," Health Economics, John Wiley & Sons, Ltd., vol. 15(12), pages 1329-1335, December.
    6. Dennis Guignet & Anna Alberini, 2015. "Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the United Kingdom," Risk Analysis, John Wiley & Sons, vol. 35(3), pages 501-517, March.
    7. Bellavance, Franois & Dionne, Georges & Lebeau, Martin, 2009. "The value of a statistical life: A meta-analysis with a mixed effects regression model," Journal of Health Economics, Elsevier, vol. 28(2), pages 444-464, March.
    8. S. Madheswaran, 2007. "Measuring the value of statistical life: estimating compensating wage differentials among workers in India," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 84(1), pages 83-96, October.
    9. Anna Alberini, 2004. "Robustness of VSL Values from Contingent Valuation Surveys," Working Papers 2004.135, Fondazione Eni Enrico Mattei.
    10. Andersson, Henrik, 2006. "Willingness to Pay for Road Safety and Estimates of the Risk of Death: Evidence from a Swedish Contingent Valuation Study," Working Papers 2006:5, Swedish National Road & Transport Research Institute (VTI).
    11. S. Madheswaran, 2008. "Measuring the Value of Life and Limb: Estimating Compensating Wage Differentials Among Workers in Chennai and Mumbai," Working Papers id:1708, eSocialSciences.
    12. Georges Dionne & Paul Lanoie, 2002. "How to Make a Public Choice About the Value of a Statistical Life: The Case of Road Safety," Cahiers de recherche 02-04, HEC Montréal, Institut d'économie appliquée.
    13. Henrik Andersson & James Hammitt & Gunnar Lindberg & Kristian Sundström, 2013. "Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(3), pages 437-456, November.
    14. Henrik Andersson & Nicolas Treich, 2011. "The Value of a Statistical Life," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 17, Edward Elgar Publishing.
    15. Strand.J., 2001. "Public- and private-good values of statistical lives : results from a combined choice-experiment and contingent-valuation survey," Memorandum 31/2001, Oslo University, Department of Economics.
    16. Shah Rome Khan & Muhammad Imran Khan & Dr. Sardar Javaid Iqbal Khan, 2023. "An Investigation into the Statistical Significance of Labor Force Longevity in Brick Kilns and Marble Industry: A Case Study of Peshawar," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 9(2), pages 679-688.
    17. Dionne, Georges & Lebeau, Martin, 2010. "Le calcul de la valeur statistique d’une vie humaine," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(4), pages 487-530, décembre.
    18. 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.
    19. Kip Viscusi, W. & Aldy, Joseph E., 2007. "Labor market estimates of the senior discount for the value of statistical life," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 377-392, May.
    20. Xiaoqi Guo & James Hammitt, 2009. "Compensating Wage Differentials with Unemployment: Evidence from China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(2), pages 187-209, February.

    More about this item

    Keywords

    Compensating Wage Differentials; Lahore; Likert Scale;
    All these keywords.

    JEL classification:

    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:49:y:2010:i:4:p:823-837. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.