Meta-analysis of Value of Statistical Life Estimates

Abstract

Value of Statistical Life (VSL) is one of the most debatable areas in economics. However, VSL is frequently used as a policy instrument for evaluating various safety, health and environmental regulations. Policymakers have to undertake the difficult task of assigning monetary value to the reduction of various health and mortality risks while analyzing safety policies. Compensating wage differential (CWD) for job risks acts as a reference point for valuing mortality risks while VSL serves as a basis to analyze these benefits of risk reduction policies. However, it has been observed in the recent past that VSL estimates vary substantially across various studies. Therefore, it has become necessary for researchers and policymakers to understand the source of this variation in order to aid policymaking. This paper attempts to bring together some of the emerging issues in VSL literature and presents a meta-analysis that is based on 34 observations from 30 hedonic wage-based VSL studies. The results of this meta-analysis show that certain emerging areas in VSL literature such as worker’s compensation benefits, age and long-term health-related job risk require more emphasis and further examination.