NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Thomas Kniesner

Syracuse University
426 Eggers Hall
Syracuse, NY 13244

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NBER Working Papers and Publications

October 2005How Unobservable Productivity Biases the Value of a Statistical Life
with W. Kip Viscusi, Christopher Woock, James P. Ziliak: w11659
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.
February 2004Life-Cycle Consumption and the Age-Adjusted Value of Life
with James P. Ziliak, W. Kip Viscusi: w10266
Our research examines empirically the age pattern of the implicit value of life revealed from workers' differential wages and job safety pairings. Although aging reduces the number of years of life expectancy, aging can affect the value of life through an effect on planned life-cycle consumption. The elderly could, a priori, have the highest implicit value of life if there is a life-cycle plan to defer consumption until old age. We find that largely due to the age pattern of consumption, which is non-constant, the implicit value of life rises and falls over the lifetime in a way that the value for the elderly is higher than the average over all ages or for the young. There are important policy implications of our empirical results. Because there may be age-specific benefits of programs to ...

Published: Kniesner, Thomas, W. Kip Viscusi, and James Ziliak. 2006. "Life-Cycle Consumption and the Age-Adjusted Value of Life," Contributions to Economic Analysis & Policy, Berkeley Electronic Press, vol. 5(1), pages 1524-1524

 
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