Value of statistical life

Methods of estimating the value of statistical life (VSL) have evolved over time, namely human capital, revealed preference and stated preference. These are discussed here along with the advantages and disadvantages of these methods. As many factors affect the VSL, heterogeneity in estimates is common both within a country and between countries. Evaluations of risk reduction and risk increase may require different estimates of VSL. The willingness to pay (WTP) and willingness to accept (WTA) approaches discussed previously are discussed in more detail here along with the theoretical expectations and variations observed in empirical studies and explanations for these variations. Another important factor of interest in the estimation of the VSL is how the risk change is expressed in survey questionnaires as this may strongly affect respondents’ comprehension of the base risk, the change from there and its impact on their WTP and WTA values