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Behavioral economics and the value of a statistical life

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  • Thomas J. Kniesner

    (Claremont Graduate University
    Syracuse University, Emeritus)

Abstract

There are many possible connections between the value of statistical life (VSL) and behavioral economics. A list of topics includes endowment effects, risk salience, ambiguity aversion, present bias, reference groups, reference points, and experienced versus decision utilities. There are also nudges that connect to estimating or using VSL in government decisions, and cousins of behavioral economic research such as interpersonal heterogeneity, experiments, neuroeconomics, and the role of beauty or personal attractiveness in labor market outcomes. Current evidence suggests that VSL and behavioral economics best connect via (1) possible multi-attribute reference group effects and (2) a possible distinction between decision utility and experienced utility.

Suggested Citation

  • Thomas J. Kniesner, 2019. "Behavioral economics and the value of a statistical life," Journal of Risk and Uncertainty, Springer, vol. 58(2), pages 207-217, June.
    • Handle: RePEc:kap:jrisku:v:58:y:2019:i:2:d:10.1007_s11166-019-09302-8
    DOI: 10.1007/s11166-019-09302-8
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    Keywords

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    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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