IDEAS home Printed from https://ideas.repec.org/p/upf/upfgen/1389.html
   My bibliography  Save this paper

Transportation choices and the value of statistical life

Author

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). Travelers 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 in order to generate some of the first revealed preference VSL estimates from Africa. The data also allows us to compare VSL estimates for travelers from 56 countries, including 20 African and 36 non-African 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-Africans. Individual characteristics, particularly job earnings, can largely account for the difference between Africans and non-Africans; Africans in the sample typically earn somewhat less. There is little evidence that individual VSL estimates are driven by a lack of information, predicted life expectancy, or cultural norms around risktaking or fatalism. 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 a variety of 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," Economics Working Papers 1389, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfgen:1389
    as

    Download full text from publisher

    File URL: https://econ-papers.upf.edu/papers/1389.pdf
    File Function: Whole Paper
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael Kremer & Edward Miguel, 2007. "The Illusion of Sustainability," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1007-1065.
    2. Jessica Cohen & Pascaline Dupas, 2008. "Free Distribution or Cost-Sharing? Evidence from a Malaria Prevention Experiment," NBER Working Papers 14406, National Bureau of Economic Research, Inc.
    3. Dora L. Costa & Matthew E. Kahn, 2004. "Changes in the Value of Life, 1940--1980," Journal of Risk and Uncertainty, Springer, vol. 29(2), pages 159-180, September.
    4. W. Viscusi, 2010. "The heterogeneity of the value of statistical life: Introduction and overview," Journal of Risk and Uncertainty, Springer, vol. 40(1), pages 1-13, February.
    5. Kunreuther, Howard & Novemsky, Nathan & Kahneman, Daniel, 2001. "Making Low Probabilities Useful," Journal of Risk and Uncertainty, Springer, vol. 23(2), pages 103-120, September.
    6. Oster, Emily, 2012. "HIV and sexual behavior change: Why not Africa?," Journal of Health Economics, Elsevier, vol. 31(1), pages 35-49.
    7. Orley Ashenfelter & Michael Greenstone, 2004. "Estimating the Value of a Statistical Life: The Importance of Omitted Variables and Publication Bias," American Economic Review, American Economic Association, vol. 94(2), pages 454-460, May.
    8. Louis Anthony Cox Jr. & Weihsueh A. Chiu & David M. Hassenzahl & Daniel M. Kammen, 2000. "Response," Risk Analysis, John Wiley & Sons, vol. 20(3), pages 295-296, June.
    9. Nava Ashraf & Erica Field & Jean Lee, 2014. "Household Bargaining and Excess Fertility: An Experimental Study in Zambia," American Economic Review, American Economic Association, vol. 104(7), pages 2210-2237, July.
    10. Hammitt James K. & Robinson Lisa A, 2011. "The Income Elasticity of the Value per Statistical Life: Transferring Estimates between High and Low Income Populations," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(1), pages 1-29, January.
    11. Robert E. Hall & Charles I. Jones, 2007. "The Value of Life and the Rise in Health Spending," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 39-72.
    12. Hammitt James K. & Robinson Lisa A, 2011. "The Income Elasticity of the Value per Statistical Life: Transferring Estimates between High and Low Income Populations," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(1), pages 1-29, January.
    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. Orley Ashenfelter, 2006. "Measuring the Value of a Statistical Life: Problems and Prospects," Economic Journal, Royal Economic Society, vol. 116(510), pages 10-23, March.
    15. W. Michael Hanemann, 1980. "Measuring the Worth of Natural Resource Facilities: Comment," Land Economics, University of Wisconsin Press, vol. 56(4), pages 482-486.
    16. Michael Greenstone & B. Kelsey Jack, 2013. "Envirodevonomics: A Research Agenda for a Young Field," NBER Working Papers 19426, National Bureau of Economic Research, Inc.
    17. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
    18. Pascaline Dupas & Edward Miguel, 2016. "Impacts and Determinants of Health Levels in Low-Income Countries," NBER Working Papers 22235, National Bureau of Economic Research, Inc.
    19. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, October.
    20. John C. Caldwell, 2000. "Rethinking the African AIDS Epidemic," Population and Development Review, The Population Council, Inc., vol. 26(1), pages 117-135, March.
    21. Hanemann, W. Michael, 1983. "Marginal welfare measures for discrete choice models," Economics Letters, Elsevier, vol. 13(2-3), pages 129-136.
    22. 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.
    23. World Bank, 2011. "World Development Indicators 2011," World Bank Publications - Books, The World Bank Group, number 2315, December.
    24. Jessica Cohen & Pascaline Dupas, 2010. "Free Distribution or Cost-Sharing? Evidence from a Randomized Malaria Prevention Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 125(1), pages 1-45.
    25. Pascaline Dupas, 2011. "Health Behavior in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 425-449, September.
    26. Alessandro Tarozzi & Aprajit Mahajan & Brian Blackburn & Dan Kopf & Lakshmi Krishnan & Joanne Yoong, 2014. "Micro-loans, Insecticide-Treated Bednets, and Malaria: Evidence from a Randomized Controlled Trial in Orissa, India," American Economic Review, American Economic Association, vol. 104(7), pages 1909-1941, July.
    27. repec:reg:rpubli:282 is not listed on IDEAS
    28. Orley Ashenfelter & Michael Greenstone, 2004. "Estimating the Value of a Statistical Life: The Importance of Omitted Variables and Publication Bias," American Economic Review, American Economic Association, vol. 94(2), pages 454-460, May.
    29. World Bank, 2014. "World Development Indicators 2014," World Bank Publications - Books, The World Bank Group, number 18237, December.
    30. Orley Ashenfelter & Michael Greenstone, 2004. "Estimating the Value of a Statistical Life: The Importance of Omitted Variables and Publication Bias," Working Papers 858, Princeton University, Department of Economics, Industrial Relations Section..
    31. Colin F. Camerer & Howard Kunreuther, 1989. "Decision processes for low probability events: Policy implications," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(4), pages 565-592.
    32. Nicholas Barberis, 2013. "The Psychology of Tail Events: Progress and Challenges," American Economic Review, American Economic Association, vol. 103(3), pages 611-616, May.
    33. Madajewicz, Malgosia & Pfaff, Alexander & van Geen, Alexander & Graziano, Joseph & Hussein, Iftikhar & Momotaj, Hasina & Sylvi, Roksana & Ahsan, Habibul, 2007. "Can information alone change behavior? Response to arsenic contamination of groundwater in Bangladesh," Journal of Development Economics, Elsevier, vol. 84(2), pages 731-754, November.
    34. Angus Deaton & Jane Fortson & Robert Tortora, 2008. "Life (evaluation), HIV/AIDS, and death in Africa," Working Papers 1121, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    35. Stefano DellaVigna & Ulrike Malmendier, 2006. "Paying Not to Go to the Gym," American Economic Review, American Economic Association, vol. 96(3), pages 694-719, June.
    36. 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. 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 of Labor Economics (IZA).
    2. Jonathan M. Lee & Laura O. Taylor, 2019. "Randomized Safety Inspections and Risk Exposure on the Job: Quasi-experimental Estimates of the Value of a Statistical Life," American Economic Journal: Economic Policy, American Economic Association, vol. 11(4), pages 350-374, November.
    3. Chiara Zanardello, 2023. "Market forces in Italian academia today (and yesterday)," Scientometrics, Springer;Akadémiai Kiadó, vol. 128(1), pages 651-698, January.

    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. Gianmarco León & Edward Miguel, 2017. "Risky Transportation Choices and the Value of a Statistical Life," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 202-228, January.
    2. Christopher Hansman & Jonas Hjort & Gianmarco León, 2015. "Firm's response and unintended health consequences of industrial regulations," Economics Working Papers 1469, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Herrera-Araujo, Daniel & Rochaix, Lise, 2020. "Does the Value per Statistical Life vary with age or baseline health? Evidence from a compensating wage study in France," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    4. Scotton Carol R., 2013. "New risk rates, inter-industry differentials and the magnitude of VSL estimates," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(1), pages 39-80, March.
    5. James Berry & Greg Fischer & Raymond Guiteras, 2020. "Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana," Journal of Political Economy, University of Chicago Press, vol. 128(4), pages 1436-1473.
    6. Chris Rohlfs & Ryan Sullivan & Thomas Kniesner, 2015. "New Estimates of the Value of a Statistical Life Using Air Bag Regulations as a Quasi-experiment," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 331-359, February.
    7. Meredith, Jennifer & Robinson, Jonathan & Walker, Sarah & Wydick, Bruce, 2013. "Keeping the doctor away: Experimental evidence on investment in preventative health products," Journal of Development Economics, Elsevier, vol. 105(C), pages 196-210.
    8. David E. Bloom & Michael Kuhn & Klaus Prettner, 2022. "Modern Infectious Diseases: Macroeconomic Impacts and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 60(1), pages 85-131, March.
    9. Andersson, Henrik & Hole, Arne Risa & Svensson, Mikael, 2016. "Valuation of small and multiple health risks: A critical analysis of SP data applied to food and water safety," Journal of Environmental Economics and Management, Elsevier, vol. 75(C), pages 41-53.
    10. Jeremy Barofsky & Stephen D. Younger, 2019. "The Effect of Government Health Expenditure on the Income Distribution: A Comparison of Valuation Methods in Ghana," Commitment to Equity (CEQ) Working Paper Series 66, Tulane University, Department of Economics.
    11. Pascaline Dupas & Edward Miguel, 2016. "Impacts and Determinants of Health Levels in Low-Income Countries," NBER Working Papers 22235, National Bureau of Economic Research, Inc.
    12. Ricardo Maertens & Alessandro Tarozzi & Kazi Matin Ahmed & Alexander van Geen, 2018. "Demand for Information on Environmental Health Risk, Mode of Delivery, and Behavioral Change: Evidence from Sonargaon, Bangladesh," Working Papers id:12934, eSocialSciences.
    13. Jacopo Bonan & Stefano Pareglio & Massimo Tavoni, 2014. "Access to Modern Energy: a Review of Impact Evaluations," Working Papers 2014.96, Fondazione Eni Enrico Mattei.
    14. Fouquet, Roger, 2011. "Long run trends in energy-related external costs," Ecological Economics, Elsevier, vol. 70(12), pages 2380-2389.
    15. Rohlfs Chris, 2012. "The Economic Cost of Conscription and an Upper Bound on the Value of a Statistical Life: Hedonic Estimates from Two Margins of Response to the Vietnam Draft," Journal of Benefit-Cost Analysis, De Gruyter, vol. 3(3), pages 1-37, August.
    16. Fimpel, Julia & Stolpe, Michael, 2006. "The welfare costs of HIV/AIDS in Eastern Europe: An empirical assessment using the economic value-of-life approach," Kiel Working Papers 1297, Kiel Institute for the World Economy (IfW Kiel).
    17. 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.
    18. Christopher Hansman & Jonas Hjort & Gianmarco León, 2019. "Interlinked firms and the consequences of piecemeal regulation," Journal of the European Economic Association, European Economic Association, vol. 17(3), pages 876-916.
    19. Henrik Lindhjem & Ståle Navrud & Nils Axel Braathen & Vincent Biausque, 2011. "Valuing Mortality Risk Reductions from Environmental, Transport, and Health Policies: A Global Meta‐Analysis of Stated Preference Studies," Risk Analysis, John Wiley & Sons, vol. 31(9), pages 1381-1407, September.
    20. 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.

    More about this item

    Keywords

    Value of statistical life; risk taking behavior; Africa; Sierra Leone;
    All these keywords.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:upf:upfgen:1389. 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: the person in charge (email available below). General contact details of provider: http://www.econ.upf.edu/ .

    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.