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Title:The value of a statistical life under ambiguity aversion PDF Logo
Authors:Treich, Nicolas
Issue Date:2008
Series/Report no.:CESifo working paper 2291
Abstract:We show that ambiguity aversion increases the value of a statistical life as soon as the marginal utility of wealth is higher if alive than dead. The intuition is that ambiguity aversion has a similar effect as an increase in the perceived baseline mortality risk, and thus operates as the “dead anyway” effect. We suggest, however, that ambiguity aversion should usually have a modest effect on the prevention of ambiguous mortality risks within benefit-cost analysis, and can hardly justify the substantial “ambiguity premium” apparently embodied in environmental policy-making.
Subjects:ambiguity
value-of-a-statistical-life
uncertainty
risk-aversion
willingness-topay
benefit-cost analysis
environmental risk
health policy
JEL:D81
Q51
I18
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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