Transportation Choices and the Value of Statistical Life

Gianmarco León, Edward Miguel

NBER Working Paper No. 19494
Issued in October 2013
NBER Program(s):Development Economics, Environment and Energy Economics, Health Economics

This paper exploits an unusual transportation setting to estimate the value of a statistical life (VSL). We estimate the trade-offs individuals are willing to make between mortality risk and cost as they travel to and from the international airport in Sierra Leone (which is separated from the capital Freetown by a body of water), and choose from among multiple transport options - namely, ferry, helicopter, hovercraft, and water taxi. The setting and original dataset allow us to address some typical omitted variable concerns, and to compare VSL estimates for travelers from different countries, all facing the same choice situation. The average VSL estimate for African travelers in the sample is US$577,000 compared to US$924,000 for non-African travelers. Individual job earnings can largely account for this difference: Africans in the sample typically earn less than non-Africans. The data implies an income elasticity of the VSL of 1.77. These revealed preference VSL estimates from a developing country fill an important gap in the existing literature, and can be used for public policy purposes, including in current debates within Sierra Leone regarding the desirability of constructing new transportation infrastructure.

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Document Object Identifier (DOI): 10.3386/w19494

Published: Gianmarco León & Edward Miguel, 2017. "Risky Transportation Choices and the Value of a Statistical Life," American Economic Journal: Applied Economics, vol 9(1), pages 202-228.

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