The value of a statistical life: Evidence from panel data

Thomas J. Kniesner, W. Kip Viscusi, Christopher Woock, James P. Ziliak

Research output: Contribution to journalArticlepeer-review

106 Scopus citations

Abstract

We address long-standing concerns in the literature on compensating wage differentials: the econometric properties of the estimated value of statistical life (VSL) and the wide range of such estimates. We confront prominent econometric issues using panel data, a more accurate fatality risk measure, and systematic application of panel data estimators. Controlling for measurement error, endogeneity, latent individual heterogeneity possibly correlated with regressors, state dependence, and sample composition yields VSL estimates of $4 million to $10 million. The comparatively narrow range clarifies the cost-effectiveness of regulatory decisions. Most important econometrically is controlling for latent heterogeneity; less important is how one does it.

Original languageEnglish
Pages (from-to)74-87
Number of pages14
JournalReview of Economics and Statistics
Volume94
Issue number1
DOIs
StatePublished - 2012

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

Fingerprint

Dive into the research topics of 'The value of a statistical life: Evidence from panel data'. Together they form a unique fingerprint.

Cite this