SSE/EFI Working Paper Series in Economics and Finance
On the Definition and Age-Dependency of the Value of a Statistical Life. A Review and Extension
Abstract: The value of preventing a fatality or (saving) a
statistical life is an important question in health economics as well as
environmental economics. This paper reviews and adds new insights to
several of the issues discussed in the literature. For example, how do we
define the value of a (statistical) life? Are there really strong
theoretical reasons for believing that the value of a life declines with
age? The paper derives definitions of the value of a statistical life in
both single-period models and life-cycle models. Models with and without
actuarially fair annuities are examined, as well as the age-profile of the
value of a statistical life.
Keywords: Value of a statistical life; value of preventing a fatality; age-specific values; willingness to pay; (follow links to similar papers)
JEL-Codes: C61; D61; I10; (follow links to similar papers)
32 pages, January 25, 2002, Revised January 29, 2002
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