Assessing the incorporation of latent variables in the estimation of the value of a statistical life.

Barrientos, Manuel; Vásquez Lavín, Felipe; Ponce Oliva, Roberto D

Abstract

For many years, the economic literature has recognized the role of attitudes, beliefs, and perceptions in estimating the value of a statistical life (VSL). However, few applications have attempted to include them. This article incorporates the perceived controllability and concern about traffic and cardiorespiratory risks to estimate VSL using a hybrid choice model (HCM). The HCM allows us to include unobserved heterogeneity and improve behavioral realism explicitly. Using data from a choice experiment conducted in Santiago, Chile, we estimate a VSL of US$3.78 million for traffic risks and US$2.06 million for cardiorespiratory risks. We found that higher controllability decreases the likelihood that the respondents would be willing to pay for risk reductions in both risks. On the other hand, concern about these risks decreases the willingness to pay for traffic risk reductions but increases it for cardiorespiratory risk reductions.

Citation

Barrientos, M., Vásquez Lavín, F., & Ponce Oliva, R. D. (2024). Assessing the incorporation of latent variables in the estimation of the value of a statistical life. Risk Analysis, 44(9), 2107-2124. https://doi.org/10.1111/risa.14286

• Journal Article Type: Article
• Acceptance Date: Feb 11, 2024
• Online Publication Date: Feb 23, 2024
• Publication Date: 2024-09
• Deposit Date: May 1, 2024
• Publicly Available Date: May 1, 2024
• Journal: Risk Analysis
• Print ISSN: 0272-4332
• Electronic ISSN: 1539-6924
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 44
• Issue: 9
• Pages: 2107-2124
• DOI: https://doi.org/10.1111/risa.14286
• Keywords: latent variables, hybrid choice model, traffic accident risk reductions, air pollution risk reductions, value of a statistical life
• Public URL: https://durham-repository.worktribe.com/output/2314049