The economic value of fatal and non‐fatal occupational risks in Mexico City using actuarial‐ and perceived‐risk estimates

Abstract

Compensating wage differentials are used to estimate marginal rates of substitution between income and both fatal and non-fatal occupational-injury risks in the Mexico City metropolitan area. Data are obtained by in-person survey of almost 600 workers and include workers' perceived risks of fatal and non-fatal occupational injury supplemented by actuarial-risk estimates from government statistics. Results using both actuarial- and perceived-risk estimates are reasonably consistent. Estimates of the value per statistical life are between 235,000 US dollars and 325,000 US dollars and estimates of the value per statistical non-fatal injury are between 3500 US dollars and 11,000 US dollars (2002 US dollars). These values are much smaller than corresponding estimates for higher-income countries but are compatible with the small number of prior estimates for lower-income countries.

Economic impact of fatal and non-fatal road traffic injuries in Guadalajara Metropolitan Area and Jalisco, Mexico

“…According to the author, if the willingness to pay method would have been used in India, the total cost would have increased from 0.8% to 2% of GDP. If a willingness to pay value were used for fatalities, the value per statistical life would be between US$268 152 and US$370 849,x about 2.5 to 3.6 times the estimated earnings loss per death in our study 36. Additionally, problems such as lack of access to health services and technology; besides low work opportunities for people with some kind of disability, contribute to underestimating the cost of RTI in low and medium income countries 23…”

Compensating Wage Differentials with Unemployment: Evidence from China

“…There is concern that occupational fatalities are under-reported, which could explain why reported occupational risks appear small compared with other economies; if risks are underestimated, our estimates of VSL would be biased upward. (2003), Viscusi (2004), Hammitt and Zhou (2006), and Hammitt and Ibarrarán (2006). Risk measure in Liu and Hammitt (1995) is perceived risk as elicited from workers.…”

Valuing Morbidity in Environmental Benefit-Cost Analysis

“…Anything other than a very minor injury is likely to involve a period of morbidity. Estimates of the value of a statistical nonfatal injury are included in a wage-risk survey in Mexico City by Hammitt & Ibarraran (2006). These authors find that nonfatal injury rates tend to be collinear with fatality rates, consistent with the earlier observations of Viscusi & Aldy (2003).…”