From wage-risk tradeoffs to the value of longevity gains: How serious is the simplicity bias?
نویسندگان
چکیده
This paper argues for an alternative to the standard model used for interpreting empirical value of statistical lives (VSL). The introduction of risk aversion with respect to the length of life significantly changes the effect of age on VSL. Our estimates suggest that current practice to give an economic value to longevity gains puts too small weight on the young. The correction we suggest overpass, in magnitude, the one introduced by the EPA when they passed from the notion of number of lives saved to the notion of years of life saved.
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