people have no preference for certain profession choice, which is not true in some of the cases. Finally, many labor market hedonic studies also suffer from measurement errors. Workers within an industry or occupation group are typically assigned with the same workplace fatality rates, but in reality, the fatality rates can be quite different for different people even working in a same industry.

The contingent valuation (CV) method is a stated preference approach. It uses surveys to ask individuals to report directly their WTPs for a specified and hypothetical reduction of risk of premature death. An obvious advantage of the CV method over the hedonic price approach is that the former has more flexibility in choosing a population and a specific type of risk (Alberini and Chiabai, 2007). However, a well-behaved CV analysis is more demanding for technical expertise in questionnaire design, sample choice, treatment of responses, etc. The biggest critic of this method is that it is hypothetical, which requires a researcher using this method to undertake additional efforts to remind people of other related factors such as real budget constraints.

# **3. VSL Estimation in Developing Countries**

Although numerous VSL studies have been conducted in the U.S. and other developed countries<sup>4</sup> , there are few studies directly conducted in the developing world. Three types of efforts have been made in order to obtain a VSL estimate in a developing country: scaling, metaanalysis and direct estimation (Bowland and Beghin, 2001). The scaling approach adopts valuation estimates made in developed countries with calibrations based on income differences. However, the scaling approach is often problematic as per capita income level is not the sole determinant of VSL, because other factors such as regional economic and demographical characteristics and cultures can also affect VSL (Mead and Brajer, 2006). Besides, income elasticity is not constant. Chestnut et al. (1997) and Alberini and Krupnick (2000) indicated that in most of the cases, the VSL’s income elasticity is higher for poorer people than for the richer one. The survey made by Viscusi and Aldy (2003) of the studies conducted in the developed countries revealed an income elasticity of 0.5 to 0.6 , while Bowland and Beghin (1998) found an elasticity of 1.8 for the developing countries studied.

The meta-analysis of VSL uses existing studies conducted in the industrialized countries to derive a VSL prediction function for developing countries, taking into considerations of differences in risk, income, human capital levels as well as demographics of a country. For example, Bowland and Beghin (2001) analyzed over 40 wage-risk studies conducted in the industrialized countries, and found VSL not only depends on income level but also on other factors such as average age, education level, coverage degree of social security system, and other social situation. Based on their estimation models and available data in Santiago, Chile, they predicted the cost of mortality due to air pollution for this South American city.

However, even the meta-analysis approach is still problematic to developing countries. Some specific factors in a developing country, such as distorted wages, cross-subsidy of public services, difficulties in valuing various homemaking services, high unemployment rates, are obviously contradictory with some implicit assumptions made in the original studies such as the

> 4 A summary table of the study results is presented in the appendix.

4