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The Valuation of the Priceless

Knutsson, Christoffer LU (2015) NEKH01 20151
Department of Economics
Abstract
Life is generally viewed to be priceless, however, for an economy to work, there has to be some sort of value-placement on human life. The concept applied to attain such a value-placement is called the value of statistical life. This study seeks to identify if there is a connection between the value of statistical life in different countries and what implications such a result might hold. Using Miller (2000) and the World Data Bank (2014) for the collection of data it becomes evident that such a connection does exist and that high income countries tend to have a higher VSL than lower income countries. However, the income elasticity of VSL is calculated to be 0.83, which suggests that the relative spending on VSL will diminish with an... (More)
Life is generally viewed to be priceless, however, for an economy to work, there has to be some sort of value-placement on human life. The concept applied to attain such a value-placement is called the value of statistical life. This study seeks to identify if there is a connection between the value of statistical life in different countries and what implications such a result might hold. Using Miller (2000) and the World Data Bank (2014) for the collection of data it becomes evident that such a connection does exist and that high income countries tend to have a higher VSL than lower income countries. However, the income elasticity of VSL is calculated to be 0.83, which suggests that the relative spending on VSL will diminish with an increasing income. Approaching the subject is not easy and problems with VSL, such as inconsistencies in applied methods and the applicability of the results, are discussed to be affecting the measurement enough to make it too unreliable to be used on a global scale. Instead it is suggested that until the day when calculations of VSL has evolved further and a standardized measuring system has been put in place, it should be constrained to comparisons between specific sectors. (Less)
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author
Knutsson, Christoffer LU
supervisor
organization
course
NEKH01 20151
year
type
M2 - Bachelor Degree
subject
keywords
Health Economics, VSL, Value of Statistical Life
language
English
id
7370734
date added to LUP
2015-06-30 15:27:23
date last changed
2015-06-30 15:27:23
@misc{7370734,
  abstract     = {Life is generally viewed to be priceless, however, for an economy to work, there has to be some sort of value-placement on human life. The concept applied to attain such a value-placement is called the value of statistical life. This study seeks to identify if there is a connection between the value of statistical life in different countries and what implications such a result might hold. Using Miller (2000) and the World Data Bank (2014) for the collection of data it becomes evident that such a connection does exist and that high income countries tend to have a higher VSL than lower income countries. However, the income elasticity of VSL is calculated to be 0.83, which suggests that the relative spending on VSL will diminish with an increasing income. Approaching the subject is not easy and problems with VSL, such as inconsistencies in applied methods and the applicability of the results, are discussed to be affecting the measurement enough to make it too unreliable to be used on a global scale. Instead it is suggested that until the day when calculations of VSL has evolved further and a standardized measuring system has been put in place, it should be constrained to comparisons between specific sectors.},
  author       = {Knutsson, Christoffer},
  keyword      = {Health Economics,VSL,Value of Statistical Life},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Valuation of the Priceless},
  year         = {2015},
}