Revisiting the Environmental Protection Agency's Value of a Statistical Life
This working paper summarizes advances in mortality risk evaluation literature since the US Environmental Protection Agency initially estimated the value of a statistical life.
Abstract
The US Environmental Protection Agency (EPA) bases its estimate of the value of a statistical life (VSL) on 17 hedonic wage studies and five contingent valuation studies conducted between 1974 and 1991. We summarize advances in the mortality risk valuation literature since these papers were published, focusing on studies that value risks to adults and were conducted in the United States. We review hedonic wage, other revealed preference, and stated preference studies, identifying papers that satisfy appropriate validity criteria. We conclude that the recent literature is sufficiently rich to permit a revision of EPA’s baseline estimate. Importantly, VSL estimates from both the averting behavior and stated preference studies we review reflect the preferences of a wider range of demographic groups than the current VSL, and newer studies better target causes of death relevant to EPA regulations.
