Aldy, 2007, Labor Market Estimates of the Senior Discount for the Value of Statistical Life, Journal of Environmental Economics and Management, 53(3): 377-392.
These article discuss the impact of the curvature of the instantaneous utility function on the value of statistical life (VSL).
The value of statistical life softens the grim nature of this discussion because it deals with how much one would spend to avoid a given risk.
A parent of three with a mortgage, in fairly in good health, who needs to supplement the basic life insurance offered at the workplace, is not going to use the value of statistical life theory to secure the future of his or her family in the event of an untimely death.
We estimate the value of statistical life and injury in Pakistan based on compensating wage differential among the blue-collar male workers of the manufacturing sector in Lahore.
Value of Statistical Life and Value of Statistical Injury were computed using the following equations:
In order to reinforce the validity of our estimates, we have also computed the Value of Statistical Life for Pakistan based on the Bowland and Beghin (2001) prediction equation which can be used to estimate the VSL for the developing countries.
One would expect the more affluent passengers to purchase those tickets because of their higher value of statistical life.
176) Although Judge Williams focused on existing published estimates that indicated that expenditures of under $10 million per life saved could be counterproductive, low estimates appear to be implausible, since it is unlikely that expenditures comparable to the value of statistical life could reduce safety levels.
They estimate a value of statistical life
for a child (VSCL) of $0.
ii) value future safety effects on the basis of the current willingness-to-pay based value of statistical life (or prevention of statistical injury/illness)--thereby, incidentally, avoiding the necessity to make difficult predictions about future values of statistical life and safety--and then subject the resultant monetary measure of benefit to a discount rate that will, in general, be smaller than that which is applicable to future variations in income.
Furthermore, it has been shown that under the latter approach, provided the social welfare function is impartial with respect to the current and future generations, then for those cases bracketed by the utilitarian and log-linear inequality-averse social welfare functions, the safety discount factor will entail an effective annual discount rate that differs very little from zero, so that future safety effects valued in terms of the current value of statistical life (or prevention of statistical injury/illness) should effectively be undiscounted.