Adjusting the Value of a Statistical Life for Age and Cohort Effects
- Presenter:
Chair: Glenn Blomquist; Discussant: Don Kenkel Mon June 5, 2006 15:30-17:00 Room 326
To resolve the theoretical ambiguity in the effect of age on the value of statistical life (VSL) this article uses a novel, age-dependent fatal risk measure to estimate age-specific hedonic wage regressions. VSL exhibits an inverted-U shaped relationship with age. In the year 2000 crosssection, workers’ VSL rises from $3.2 million (ages 18-24), to $9.9 million (35-44), and declines to $3.8 million (55-62). Controlling for birth-year cohort effects in a minimum distance estimator yields a peak VSL of $7.8 million at age 46, and flattens the VSL-age relationship. The value of statistical life-year also follows an inverted-U shape with age.
