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Wellbeing measures of mortality risks: life-cycle contradictions and ordinal index challenges

Published online by Cambridge University Press:  17 January 2020

W. KIP VISCUSI
W. KIP VISCUSI*
Affiliation:
University Distinguished Professor of Law, Economics, and Management, Vanderbilt Law School, Nashville, TN, USA
*
*Correspondence to: Vanderbilt Law School, 131 21st Ave. South, Nashville, TN37203, USA. Email: [email protected]
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Abstract

The value of a statistical life (VSL) monetizes the expected loss in wellbeing associated with the risk of death. The utility loss resulting from a fatality is central to the empirical framework for estimating the VSL. The VSL trajectory over the life cycle exhibits an inverted-U shape, following a trajectory similar to that of lifetime patterns of consumption. The U-shaped pattern displayed by happiness measures over the life cycle is the opposite of the inverted-U shape pattern displayed by the VSL. It is consequently inappropriate to use happiness measures as ordinal ranking substitutes for the VSL for the purposes of estimating the benefits of mortality risk reduction. Compared to ordinal wellbeing scales, the VSL also offers a variety of additional capabilities by providing a cardinal index of the unit benefits for changes in mortality risks.

Type
Articles
Information
Behavioural Public Policy , Volume 4 , Special Issue 2: On Happiness Being the Goal of Government , July 2020 , pp. 245 - 253
Copyright
Copyright © Cambridge University Press 2020

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