The Value of a Statistical Life: How Much Would You Be Willing To Pay To Reduce Your Risk Of Death?

What is the value of a statistical life (VSL)? How does one calculate such a value? Does everyone’s life have a different value? These questions are among the most provocative and delicate topics in economics. The VSL is defined as the tradeoff between money and small risks of death. It is not to be confused with the amount of compensation one would receive for a wrongful death. It has important policy implications as economic estimates of the VSL amounts have included evidence from market decisions that reveal the implicit values reflected in behavior as well as the use of survey approaches to elicit these money-risk tradeoffs directly. Therefore, the following paper will look at the value of a statistical life, focusing on two things: the age-VSL relationship and the relationship between income and the VSL. It will then talk about some of the factors that affect the VSL and how the VSL itself affects policies and regulations