The Value of Statistical Life: Pursuing the Deadliest Catch

• Main Authors: Kurt E. Schnierφ, William C. Horrace, Ronald G. Felthoven, U. S. Marine, Fisheries Service
• Other Authors: The Pennsylvania State University CiteSeerX Archives
• Format: Text
• Language: English
• Subjects: value of statistical life (VSL; discrete choice; Alaskan crab fisheries. JEL Codes; J28; Q22; Red king crab
• Online Access: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.518.8435; http://www.ncsu.edu/cenrep/workshops/TREE/documents/Schnier_VLS_paper.pdf

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 from data on the Alaskan red king crab fishery. Using weather conditions and policy variables as instruments, our estimates of the VSL range from $4.6M to $4.9M (depending on the modeling assumption) and are robust to the incorporation of heterogeneous preferences. Furthermore, using variability in vessel crew size we are able to estimate a value of an altruistic life (the value that captains