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Transportation Choices and the Value of Statistical Life

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  • Gianmarco León
  • Edward Miguel

Abstract

This paper exploits an unusual transportation setting to estimate the value of a statistical life (VSL). We estimate the trade-offs individuals are willing to make between mortality risk and cost as they travel to and from the international airport in Sierra Leone (which is separated from the capital Freetown by a body of water), and choose from among multiple transport options - namely, ferry, helicopter, hovercraft, and water taxi. The setting and original dataset allow us to address some typical omitted variable concerns, and to compare VSL estimates for travelers from different countries, all facing the same choice situation. The average VSL estimate for African travelers in the sample is US$577,000 compared to US$924,000 for non-African travelers. Individual job earnings can largely account for this difference: Africans in the sample typically earn less than non-Africans. The data implies an income elasticity of the VSL of 1.77. These revealed preference VSL estimates from a developing country fill an important gap in the existing literature, and can be used for public policy purposes, including in current debates within Sierra Leone regarding the desirability of constructing new transportation infrastructure.

Suggested Citation

  • Gianmarco León & Edward Miguel, 2013. "Transportation Choices and the Value of Statistical Life," NBER Working Papers 19494, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19494
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    References listed on IDEAS

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    Cited by:

    1. Jonathan M. Lee & Laura O. Taylor, 2014. "Randomized Safety Inspections And Risk Exposure On The Job: Quasi-Experimental Estimates Of The Value Of A Statistical Life," Working Papers 14-05, Center for Economic Studies, U.S. Census Bureau.
    2. Heywood, John S. & O'Mahony, Mary & Siebert, W. Stanley & Rincon-Aznar, Ana, 2018. "The Impact of Employment Protection on the Industrial Wage Structure," IZA Discussion Papers 11788, Institute for the Study of Labor (IZA).

    More about this item

    JEL classification:

    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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