Using Mandated Speed Limits to Measure the Value of a Statistical Life

Orley Ashenfelter, Michael Greenstone

NBER Working Paper No. 9094
Issued in August 2002
NBER Program(s):   HC   LS   PE

In 1987 the federal government permitted states to raise the speed limit on their rural interstate roads, but not on their urban interstate roads, from 55 mph to 65 mph for the first time in over a decade. Since the states that adopted the higher speed limit must have valued the travel hours they saved more than the fatalities incurred, this experiment provides a way to estimate an upper bound on the public's willingness to trade off wealth for a change in the probability of death. We find that the 65 mph limit increased speeds by approximately 3.5% (i.e., 2 mph), and increased fatality rates by roughly 35%. In the 21 states that raised the speed limit and for whom we have complete data, the estimates suggest that about 125,000 hours were saved per lost life. Valuing the time saved at the average hourly wage implies that adopting states were willing to accept risks that resulted in a savings of $1.54 million (1997$) per fatality, with a sampling error that might be around one-third this value. Since this estimate is an upper bound of the value of a statistical life (VSL), we set out a simple structural model that is identified by variability across the states in the probability of the adoption of increased speed limits to recover the VSL. The impirical implementation of this model produces estimates of the VSL that are generally smaller that $1.54 million, but these estimates are very imprecise.

download in pdf format
   (4092 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w9094

Published: Ashenfelter, Orley and Micahel Greenstone. "Using Mandated Speed Limits To Measure The Value Of A Statistical Life," Journal of Political Economy, 2004, v112(2,Part2), S226-S267. citation courtesy of

Users who downloaded this paper also downloaded* these:
León and Miguel w19494 Transportation Choices and the Value of Statistical Life
Viscusi and Aldy w9487 The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World
Ashenfelter w11916 Measuring the Value of a Statistical Life: Problems and Prospects
Thaler and Rosen The Value of Saving a Life: Evidence from the Labor Market
Ashenfelter and Greenstone w10401 Estimating the Value of a Statistical Life: The Importance of Omitted Variables and Publication Bias
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us