*The author is Associate Professor of Economics at Illinois State University. Helpful comments from Glenn Blomquist, Rati Ram and anonymous referees are acknowledged. This material is based upon work supported by the National Science Foundation under Grant No. SES-8022658. Any opinions, findings, and conclusions or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the National Science Foundation.
THE INFLUENCE OF RISK VARIABLE DEFINITION ON VALUE-OF-LIFE ESTIMATES
Article first published online: 28 SEP 2007
Volume 23, Issue 2, pages 277–294, April 1985
How to Cite
DILLINGHAM, A. E. (1985), THE INFLUENCE OF RISK VARIABLE DEFINITION ON VALUE-OF-LIFE ESTIMATES. Economic Inquiry, 23: 277–294. doi: 10.1111/j.1465-7295.1985.tb01765.x
- Issue published online: 28 SEP 2007
- Article first published online: 28 SEP 2007
Empirical “value-of-life” estimates derived from labor market wage-risk premiums have varied widely. This paper examines the influence of risk variable definition on these estimates. Value-of-life estimates are derived for one sample from a set of several risk measures. The analysis reveals that the risk variable definition can markedly affect the value-of-life estimate. Further, the paradoxical pattern of “high” estimates from industry risk data and “low” estimates from occupation data is shown to be attributable to different risk definition, not differences in the characterization of risk faced by a given sample of works. Finally, by associating consistently low estimates with one particular risk variable this study suggests much more uniformity in the value-of-life estimates than previously believed.