TY  - JOUR
AU  - DeLeire,Thomas
AU  - Timmins,Christopher
TI  - Roy Model Sorting and Non-Random Selection in the Valuation of a Statistical Life
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14364
PY  - 2008
Y2  - September 2008
UR  - http://www.nber.org/papers/w14364
L1  - http://www.nber.org/papers/w14364.pdf
N1  - Author contact info:
Thomas DeLeire
La Follette School of Public Affairs
University of Wisconsin-Madison
1225 Observatory Drive
Madison, WI 53706
Tel: 608-263-6998
Fax: 608/263-2820
E-Mail: deleire@wisc.edu

Christopher Timmins
Department of Economics
Duke University
209 Social Sciences Building
P.O. Box 90097
Durham, NC 27708-0097
Tel: 919/660-1809
Fax: 919/684-8974
E-Mail: christopher.timmins@duke.edu
AB  - Wage-hedonics is used to recover the value of a statistical life by exploiting the fact that workers choosing riskier occupations will be compensated with a higher wage.  However, Roy (1951) suggests that observed wage distributions will be distorted if individuals select into jobs according to idiosyncratic returns.  We illustrate how this type of sorting may bias wage-hedonic VSL estimates and describe two estimators that correct for it.  Using data from the CPS, we recover VSL estimates that are three to four times larger than those based on the traditional techniques, statistically significant, and robust to a wide array of specifications.
ER  -