Date of Award:

12-2008

Document Type:

Thesis

Degree Name:

Master of Science (MS)

Department:

Economics and Finance

Department name when degree awarded

Economics

Committee Chair(s)

Paul M. Jakus

Committee

Paul M. Jakus

Committee

E. Bruce Godfrey

Committee

John E. Keith

Abstract

The value of statistical life is an estimate of the monetary benefits of preventing an anonymous death. Society's willingness to pay to eliminate private health risks determines agencies' value-of-statistical-life estimates. Most estimates ignore society's willingness to pay to eliminate others' health risks. There are two possible reasons. First, altruism does not exist: Peter is not willing to pay to save Paul's life. The second possible reason is a bit more complicated. Certain economists argue that increasing benefit estimates to account for altruism involves double-counting.

The purpose of this thesis is to evaluate these possibilities. Accounting for altruism, it turns out, is not double-counting if altruism is paternalistic. Furthermore, I empirically demonstrate that people are willing to pay to reduce others' health risks. Thus, the two justifications for ignoring altruism are, seemingly, unfounded, which indicates that analysts should increase the value of statistical life to account for altruism.

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8c8682e5e10c9c91c379cbf7899d2f9e

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