TY  - JOUR
AU  - Kaplow,Louis
TI  - The Value of a Statistical Life and the Coefficient of Relative Risk Aversion
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9852
PY  - 2003
Y2  - July 2003
UR  - http://www.nber.org/papers/w9852
L1  - http://www.nber.org/papers/w9852.pdf
N1  - Author contact info:
Louis Kaplow
Harvard University
Hauser 322
Cambridge, MA  02138
Tel: 617/495-4101
Fax: 617/496-4880
E-Mail: meskridge@law.harvard.edu
AB  - Individuals' risk preferences are estimated and employed in a variety of settings, notably including choices in financial, labor, and product markets.  Recent work, especially in financial economics, provides estimates of individuals' coefficients of relative risk aversion (CRRA's) in excess of one, and often significantly higher.  However, it can be shown that high CRRA's imply equally high values for the income elasticity of the value of a statistical life.  Yet estimates of this elasticity, derived from labor and product markets, are in the range of 0.5 to 0.6. Furthermore, it turns out that even a CRRA below one is difficult to reconcile with these elasticity estimates.  Thus, there appears to be an important (additional) anomaly involving individuals' risk-taking behavior in different market settings.
ER  -