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Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy

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Abstract

Situations in which risk is at least partly a matter of choice provide opportunities to analyze behavior and estimate the willingness to pay for small changes in mortality risks. Individuals engage in household production of health and safety as long as the value of the gain in risk reduction is worth the money, time, and any disutility necessary to produce the reduction in risk. This paper reviews values of statistical life inferred from choices about highway speeds, traveler use of protective equipment, crashworthiness of motor vehicles, and housing location near Superfund sites. The best estimates, close to $4 million in year 2000 dollars, are valuable complements to estimates from labor and constructed markets. Interestingly some evidence suggests that values for children and seniors are not less than middle-aged adults. Issues of risk perception and other challenges related to estimation are discussed.

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Authors and Affiliations

  1. Department of Economics and Martin School of Public Policy and Administration, University of Kentucky, Gatton College of Business and Economics Building 335H, Lexington, KY, 40506-0034, USA

    Glenn C. Blomquist

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Blomquist, G.C. Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy. Review of Economics of the Household 2, 89–110 (2004). https://doi.org/10.1023/B:REHO.0000018024.53114.3a

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