The heterogeneity of the value of statistical life: evidence and policy implications

W. Kip Viscusi

Benefit–Cost Analyses for Security Policies

Does Increased Safety Have to Reduce Efficiency?

Edited by Carol Mansfield and V. K. Smith

Benefit–Cost Analyses for Security Policies describes how to undertake the evaluation of security policies within the framework of benefit–cost analysis and offers a unique contribution to analysis of homeland security regulations in the United States. The authors outline how established procedures for benefit–cost analysis must adapt to meet challenges posed by current security policy, through examining specific security related regulations. The logic of risk assessment, selection of a discount rate, valuation of travellers’ time when delayed due to screening, valuation of changes in risks of injury or death, and impacts of terrorist events on the economy as a whole are among the issues discussed. An outline of the research and policy evaluation steps needed to build robust benefit-cost methods to evaluate security related regulations in the future is presented in the book.

Monograph Book

Published in print:: 30 Jan 2015

ISBN:: 9781784711078

eISBN:: 9781784711085

DOI:: https://doi.org/10.4337/9781784711085

Pages:: c 296

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Chapter 4: The heterogeneity of the value of statistical life: evidence and policy implications

W. Kip Viscusi

Monograph Chapter

Published:: 30 January 2015

Category:: Monograph Chapter

DOI:: https://doi.org/10.4337/9781784711085.00011

Pages:: 78–116 (39 total)

Collection: Economics 2015

Extract

The value of a statistical life (VSL) is a measure of individuals’ money–risk trade-off and is the most widely used economic measure for valuing changes in risk. The academic literature includes dozens of labor market studies of VSL. There have also been studies of VSL based on price–risk trade-off for the product market as well as risk-taking decisions ranging from choice of highway speed to use of seat belts. This chapter focuses on the variation in the VSL both across different studies in the academic literature and in different policy contexts. There are important differences in the VSL with respect to individual risk-taking behaviors as well as personal characteristics, including age, income, race, gender and immigrant status. What are these differences and what are the policy implications for benefit assessment? To assess such issues, I explore both the VSL estimates themselves and their implications for the structure of labor markets.

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