TY  - JOUR
AU  - Evans,Mary F.
AU  - Smith,V. Kerry
TI  - Complementarity and the Measurement of Individual Risk Tradeoffs: Accounting for Quantity and Quality of Life Effects
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13722
PY  - 2008
Y2  - January 2008
UR  - http://www.nber.org/papers/w13722
L1  - http://www.nber.org/papers/w13722.pdf
N1  - Author contact info:
Mary F. Evans
The Robert Day School
  of Economics and Finance
Claremont McKenna College
500 E. Ninth Street
Claremont, CA 91711
E-Mail: Mary.Evans@ClaremontMcKenna.edu

V. Kerry Smith
Department of Economics
W.P. Carey School of Business
P.O. Box  879801
Arizona State University
Tempe, AZ 85287-9801
Tel: 480/727-9812
Fax: 480/965-0748
E-Mail: kerry.smith@asu.edu
AB  - This paper considers the factors responsible for differences with age in estimates of the wage compensation an individual requires to accept increased occupational fatality risk.  We derive a relationship between the value of a statistical life (VSL) and the degree of complementarity between consumption and labor supplied when health status serves as a potential source of variation in this relationship. Our empirical analysis finds that variations in an individual's health status or quality of life and anticipated longevity threats lead to significant differences in the estimated wage/risk tradeoffs. We describe how extensions to the specification of hedonic wage models, including measures for quality of life and anticipated longevity threats, help to explain the diversity in past studies examining how the estimated wage–risk tradeoff changes with age.
ER  -