Complementarity and the Measurement of Individual Risk Tradeoffs: Accounting for Quantity and Quality of Life Effects

TitleComplementarity and the Measurement of Individual Risk Tradeoffs: Accounting for Quantity and Quality of Life Effects
Publication TypeJournal Article
Year of Publication2008
AuthorsEvans, MF, V. Smith, K
JournalEnvironmental and Resource Economics
Volume41
Issue3
Pagination381-400
KeywordsEmployment and Labor Force, Net Worth and Assets
Abstract

This paper considers the factors responsible for differences with age in estimates of the wage compensation an individual requires to accept increased occupational fatality risk. We derive a relationship between the value of a statistical life (VSL) and the degree of complementarity between consumption and labor supplied when health status serves as a potential source of variation in this relationship. Our empirical analysis finds that variations in an individual s health status or quality of life and anticipated longevity threats lead to significant differences in the estimated wage/risk tradeoffs. We describe how extensions to the specification of hedonic wage models, including measures for quality of life and anticipated longevity threats, help to explain the diversity in past studies examining how the estimated wage risk tradeoff changes with age.

URLhttp://dx.doi.org/10.1007/s10640-008-9197-9
DOI10.1007/s10640-008-9197-9
Endnote Keywords

Business and Economics/Wages

Endnote ID

25430

Citation Key7192