TY  - JOUR
AU  - Kniesner,Thomas J.
AU  - Viscusi,W. Kip
AU  - Woock,Christopher
AU  - Ziliak,James P.
TI  - How Unobservable Productivity Biases the Value of a Statistical Life
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11659
PY  - 2005
Y2  - October 2005
UR  - http://www.nber.org/papers/w11659
L1  - http://www.nber.org/papers/w11659.pdf
N1  - Author contact info:
Thomas Kniesner
Syracuse University
426 Eggers Hall
Syracuse, NY  13244
E-Mail: tkniesne@maxwell.syr.edu

W. Kip Viscusi
Vanderbilt Law School
131 21st Avenue South
Nashville, TN 37203-1181
Tel: 615/343-7715
E-Mail: kip.viscusi@vanderbilt.edu

Christopher Woock
E-Mail: christopher.woock@conference-board.org
AB  - A prominent theoretical controversy in the compensating differentials literature concerns unobservable individual productivity. Competing models yield opposite predictions depending on whether the unobservable productivity is safety-related skill or productivity generally. Using five panel waves and several new measures of worker fatality risks, first-difference estimates imply that omitting individual heterogeneity leads to overestimates of the value of statistical life, consistent with the latent safety-related skill interpretation. Risk measures with less measurement error raise the value of statistical life, the net effect being that estimates from the static model range from $5.3 million to $6.7 million, with dynamic model estimates somewhat higher.
ER  -