Skip to main content

The value of a statistical life in Chile

Abstract

In this article, we estimated the value of a statistical life and the value of a statistical injury (VSI) for Chilean workers using a combination of data from the year 2006 from the Chilean National Socio-Economic Survey, which provides workers’ characteristics, and annual statistics from the Chilean Safety Association, which provide labor accident risk data. We estimated a hedonic log-wage equation taking into account of selection bias and endogeneity. The estimated value of a statistical life was US$4,625,958, which increased by almost a factor three after correcting for endogeneity (US$12,826,520). On the other hand, the estimated VSI was US$30,840. The uncorrected results were lower than the values reported by other authors for various developed countries, but greater than those estimated using indirect approaches for Chile.

This is a preview of subscription content, access via your institution.

Notes

  1. 1.

    All values throughout this paper are expressed in US dollars of 2006.

References

  1. Arabsheibani G, Marin A (2001) Self-selectivity bias with a continuous variable: potential pitfall in a common procedure. Appl Econ 33:1903–1910

    Article  Google Scholar 

  2. Baranzini A, Ferro Luzzi G (2001) The economic value of risks to life: evidence from the Swiss labour market. Swiss J Econ Stat 137:149–170

    Google Scholar 

  3. Bowland BJ, Beghin JC (2001) Robust estimates of value of a statistical life for developing economies: an application to pollution and mortality in Santiago. J Policy Model 23:385–396

    Article  Google Scholar 

  4. Cousineau J, Lacroix R, Girard AM (1992) Occupational hazard and wage compensating differentials. Rev Econ Stat 74:166–169

    Article  Google Scholar 

  5. Field F, Field M (2008) Environmental economics. McGraw-Hill Irwin, Boston

    Google Scholar 

  6. Freeman AM (2003) The measurement of environmental and resource values: theory and methods. Resources for the Future, Inc., Washington, D.C.

    Google Scholar 

  7. Garen JE (1988) Compensating wage differentials and the endogeneity of Job riskiness. Rev Econom Stat 70:9–16

    Article  Google Scholar 

  8. Gurdenson M, Hyatt D (2001) Workplace risks and wages: Canadian evidence from alternative models. Can J Econ 34:377–395

    Article  Google Scholar 

  9. Hausman JA (1978) Specification tests in econometrics. Econometrica 46:1251–1271

    Article  Google Scholar 

  10. Heckman J (1979) Sample selection bias as a specification error. Econometrica 47:153–161

    Article  Google Scholar 

  11. Hwang H, Reed W, Hubbard C (1992) Compensating wage differentials and unobserved productivity. J Polit Econ 100:835–858

    Article  Google Scholar 

  12. Kim S, Fishback PV (1993) Institutional change, compensating differentials, and accident risk in American railroading, 1892–1945. J Econ Hist 53:796–823

    Article  Google Scholar 

  13. Kniesner TJ, Leeth JD (1991) Compensating wage differentials for fatal injury risk in Australia, Japan, and the United States. J Risk Uncertainty 4:75–90

    Article  Google Scholar 

  14. Knieser T, Viscusi W, Woock C, Ziliaz J (2012) The value of a statistical life: evidence from panel data. Rev Econ Stat 94(1):74–87

    Article  Google Scholar 

  15. Kochi I (2007) Essays on the value of a statistical life. Economics Dissertations, Paper 29

  16. Liu JT, Hammitt JK (1999) Perceived risk and value of workplace safety in a developing country. J Risk Res 2:263–275

    Article  Google Scholar 

  17. Marin A, Psacharopoulos H (1982) The reward for risk in the labor market: evidence from the United Kingdom and a reconciliation with other studies. J Polit Econ 90:827–853

    Article  Google Scholar 

  18. Martinello F, Meng R (1992) Workplace risks and the value of hazard avoidance. Can J Econ 25:333–345

    Article  Google Scholar 

  19. McConnel C, Brue S, Macpherson D (2006) Contemporary labour economics. McGraw-Hill Irwin, Boston

    Google Scholar 

  20. Meng R, Smith D (1990) The valuation of risk of death in public sector decision-making. Can Public Policy 16:137–144

    Article  Google Scholar 

  21. Miller P, Mulvey C, Norris K (1997) Compensating differentials for risk of death in Australia. Econ Rec 73:363–372

    Article  Google Scholar 

  22. Miller T (2000) Variations between countries in values of statistical life. J Transp Econ Policy 34:169–188

    Google Scholar 

  23. Riera A, Ripoll A, Mateu J (2007) Estimacin del valor estadstico de la vida en Espaa: Una aplicacin del Mtodo de Salarios Hednicos. Revista de Economa Pblica 181:29–48

    Google Scholar 

  24. Scheidel W (2010) Real wages in early economies: evidence for living standards from 1800 BCE to 1300 CE. J Econ Soc Hist Orient 53:425–462

    Article  Google Scholar 

  25. Shanmugam K (2001) Self-selection bias in the estimates of compensating differentials for job risks in India. J Risk Uncertainty 22(3):263–275

    Article  Google Scholar 

  26. Siebert W, Wei X (1994) Compensating wage differentials for workplace accidents: evidence for union and nonunion workers in the UK. J Risk Uncertainty 9(1):61–76

    Article  Google Scholar 

  27. Siebert W, Wei X (1998) Wage compensation for job risks: the case of Hong Kong. Asian Econ J 12(2):171–181

    Article  Google Scholar 

  28. Stock JH, Yogo M (2005) Testing for weak instruments in linear IV regression. In: Andrews DWK, Stock JH (eds) Identification and inference for econometric models: essays in honor of Thomas Rothenberg. Cambridge University Press, Cambridge, pp 80–108

    Chapter  Google Scholar 

  29. Smith R (1974) The feasibility of an injury tax approach to occupational safety. Law Contemp Problems 38(4):730–744

    Article  Google Scholar 

  30. Timmins C, Murdock J (2007) A revealed preference approach to the measurement of congestion in travel cost models. J Environ Econ Manag 53:230–249

    Article  Google Scholar 

  31. Viscusi WK (1993) The value of risk to life and health. J Econ Literature XXXI:1912–1946

    Google Scholar 

  32. Viscusi WK, Aldy JE (2003) The value of a statistical life: a critical review of market estimates throughout the world. J Risk Uncertainty 27(1):5–76

    Article  Google Scholar 

  33. Viscusi WK, Aldy JE (2007) Labor market estimates of the senior discount for the value of statistical life. J Environ Econ Manag 53(3):377–392

    Article  Google Scholar 

  34. Wooldridge J (2002) Econometric analysis of cross section and panel data. The MIT Press, Cambridge

    Google Scholar 

  35. Weiss P, Maier G, Gerking S (1986) The economic evaluation of job safety: a methodological survey and some estimates for Austria. Empirica 13(1):53–67

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Felipe Vasquez-Lavin.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Parada-Contzen, M., Riquelme-Won, A. & Vasquez-Lavin, F. The value of a statistical life in Chile. Empir Econ 45, 1073–1087 (2013). https://doi.org/10.1007/s00181-012-0660-7

Download citation

Keywords

  • Value of a statistical life
  • Value of a statistical injury
  • Hedonic wages

JEL Classification

  • J17
  • J28