The Value of Statistical Life: Pursuing the Deadliest Catch

• Main Authors: Kurt E. Schnier Φ, William C. Horrace, Ronald G. Felthoven
• Other Authors: The Pennsylvania State University CiteSeerX Archives
• Format: Text
• Language: English
• Published: 2009
• Subjects: value of statistical life (VSL; discrete choice; Alaskan crab fisheries. JEL Codes; J28; Q22 φ; Red king crab; Snow crab
• Online Access: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.330.3563; http://www.uis.no/getfile.php/sv/seminar kurt schnier.pdf

(Do not circulate or cite without the authors permission) Observed tradeoffs between monetary returns and fatality risk identify estimates of the value of a statistical life (VSL), which inform public policy and quantify preferences for environmental quality, health and safety. To date, few investigations have estimated the VSL associated with tradeoffs between returns from natural resource extraction activities and the fatality risks they involve. Understanding these tradeoffs (and the VSL that they imply) may be used to inform resource management policy and safety regulations, as well as our general understanding of the value of life. By modeling a commercial fishing captain's choice to fish or not, conditional on the observed risk, this research investigates these topics using data from the Alaskan red king crab and snow crab fisheries. Using weather conditions and policy variables as instruments, our estimates of the mean VSL range from $4.20M to $4.86M (depending on the modeling assumption and fishery analyzed) and are robust to the incorporation of heterogeneous preferences. Furthermore, given the unique nature of the data we are able to conduct an intra-vessel comparison of the VSL and conclude that for roughly 92 % of the fishermen observed in the data set their VSL estimates are stable across fisheries.