The Income Elasticity of Global Values of a Statistical Life: Stated Preference Evidence

Abstract

Examination of estimates of the income elasticity of the value of a statistical life based on international stated preference studies yields an average between 0.94 and 1.05 overall and 0.65 and 0.80 after controlling for covariates. Quantile regression estimates indicate that the income elasticity is about 0.55 for more affluent countries and 1.0 for lower income nations, i.e., those countries that have estimates of the value of a statistical life below $2 million or per capita income levels below $3212. The estimates distinguish the values of the income elasticity across country either by income level or by the value of a statistical life. These elasticities are similar to those found in revealed preference labor market studies. The estimates are robust, controlling for possible sample selection bias and the influence of covariates, such as the type of risk.