In energy and environmental investment or policy analysis, the valuation of human health risk is becoming an increasingly important issue. An often used measure of the human health risk is the value of the statistical life. However, estimates of this value tend to vary significantly from one study to another, due to the controversial nature of the problem. We use a recently proposed approach to synthesizing estimates of the value of life given in 19 different studies for the United States. The approach uses the Finite Mixture Distributions statistical technique and the Analytic Hierarchy Process multi-attribute analysis method. In the multi-attribute analysis, we assess the value of life estimates using nine criteria. We present the results obtained, and describe the uncertainty involved and some possible applications of the results.
Get full access to this article
View all access options for this article.
References
1.
AmouldR. and NicholsL.M. (1983), “Wage-risk Premiums and Worker's Compensation: A Refinement of Estimates of Compensating Wage Differentials”, Journal of Political Economy, Vol. 91, No. 2, pp 332–340.
2.
BrownC (1980), “Equalizing Differences in the Labor Market”, Quarterly Journal of Economics, Vol. 94, No. 1, pp 113–134.
3.
DillinghamA.E. (1985), “The Influence of Risk Variable Definition on Value-of-life Estimates”, Economic Inquiry, Vol. 23, No. 2, pp 277–294.
4.
FankhauserS. (1994), “The Social Costs of Greenhouse Gas Emissions: An Expected Value Approach”, The Energy Journal, Vol. 15, No. 2, pp 157–184.
5.
GarenJ. (1988), “Compensating Wage Differentials and the Endogeneity of Job Riskiness”, The Review of Economics and Statistics, Vol. 70, No. 1, pp 9–16.
6.
HohmeyerO. (1988), Social Costs of Energy Consumption: External Effects of Electricity Generation in the Federal Republic of Germany, Springer, Berlin.
7.
HuangJ.P., AngB. W. and PohK.L. (1996), “Synthesizing Environmental Externality Costs – A Statistical and Multi-attribute Analysis Approach”, Energy and Environment, Vol. 7, No. 3, pp. 253–266.
8.
KniesnerT.J. and LeethJ.D. (1991), “Compensating Wage Differentials for Fatal Injury Risk in Australia, Japan, and the United States”, Journal of Risk and Uncertainty, Vol. 4, No. 1, pp 75–90.
9.
LeighJ.P. (1987), “Gender, Firm Size, Industry and Estimates of the Value-of-life”, Journal of Health Economics, Vol. 6, pp 255–273.
10.
LeighJ.P. and FolsomR.N. (1984), “Estimates of the Value of Accident Avoidance at the Job Depend on Concavity of the Equalizing Differences Curve”, The Quarterly Review of Economics and Business, Vol. 24, No. 1, pp 56–66.
11.
MooreM.J. and ViscusiW.K. (1988a), “Doubling the Estimated Value of Life: Results Using New Occupational Fatality Data”, Journal of Policy Analysis and Management, Vol. 7, No. 3, pp 476–490.
12.
MooreM.J. and ViscusiW.K. (1988b), “The Quantity-adjusted Value of Life”, Economic Inquiry, Vol. 26, No. 3, pp 369–388.
13.
MooreM.J. and ViscusiW.K. (1990a), “Discounting Environmental Health Risks: New Evidence and Policy Implications”, Journal of Environmental Economics and Management, Vol. 18, No. 2, pp S51–S62.
14.
MooreM.J. and ViscusiW.K. (1990b), “Models for Estimating Discount Rates for Long-term Health Risks Using Labor Market Data”, Journal of Risk and Uncertainty, Vol. 3, No. 4, pp 381–402.
15.
OlsonC.A. (1981), “An Analysis of Wage Differentials Received by Workers on Dangerous Jobs”, Journal of Human Resources, Vol. 16, No. 1, pp 167–185.
16.
OttingerR.L., WooleyD. R., RobinsonN.A., HodasD.R. and BabbS.E. (1991), Environmental Costs of Electricity, Oceana Publications Inc. New York.
17.
PearceD. and CrowardsT. (1996), “Particulate Matter and Human Health in the United Kingdom”, Energy Policy, Vol. 24, No. 7, pp 609–619.
18.
SaatyT.L. (1980), The Analytic Hierarchy Process, McGraw-Hill, New York.
19.
SaatyT.L. (1994), Fundamentals of Decision Making and Priority Theory with the Analytical Hierarchy Process, RWS Publications, Pittsburgh.
20.
SaatyT.L. and VargasL.G. (1982), The Logic of Priorities, Kluwer Nijhoff, Boston.
21.
SmithA. (1937), The Wealth of Nations, Modem Library, New York.
22.
SmithR.S. (1974), “The Feasibility of an ‘Injury Tax’ Approach to Occupational Safety”, Law and Contemporary Problems, Vol. 38, No. 4, pp 730–744.
23.
SmithV.K. and GilbertC. (1984), “The Implicit Risks to Life: A Comparative Analysis”, Economics Letters, Vol. 16, pp 393–399.
24.
U.S. Department of Commerce (1994), Statistical Abstract of the United States, U.S. Department of Commerce, Washington DC.
25.
ViscusiW.K. (1978), “Labor Market Valuations of Life and Limb: Empirical Estimates and Policy Implications”, Public Policy, Vol. 26, No. 3, pp 359–386.
26.
ViscusiW.K. (1986), “The Valuation of Risks to Life and Health: Guidelines for Policy Analysis”, in BentkoverJ.D., CovelloV.T. and MumpowerJ., Ed., Benefits Assessment: The State of the Art, D. Reidel Publishing Company, Dordrecht.
27.
ViscusiW.K. (1992), Fatal Tradeoffs, Oxford University Press, Oxford, New York.
28.
ViscusiW.K. and MooreM.J. (1989), “Rates of Time Preference and Valuations of the Duration of Life”, Journal of Public Economics, Vol. 38, pp 297–317.
