Title: How unobservable productivity biases the value of a statistical life
Description: "A prominent theoretical controversy in the compensating differentials literature concerns unobservable individual productivity.  Competing models yield opposite predictions depending on whether the unobservable productivity is safety-related skill or productivity generally.  Using five panel waves and several new measures of worker fatality risks, first-difference estimates imply that omitting individual heterogeneity leads to overestimates of the value of statistical life, consistent with the latent safety-related skill interpretation.  Risk measures with less measurement error raise the value of statistical life, the net effect being that estimates from the static model range from $5.3 million to $6.7 million, with dynamic model estimates somewhat higher"--National Bureau of Economic Research web site.
Subjects: Human life, Valuation