Measuring the Value of a Statistical Life: Problems and Prospects

Tradeoffs between monetary wealth and fatal safety risks are summarised in the value of a statistical life (VSL), a measure that is widely used for the evaluation of public policies in medicine, the environment, and transportation safety. This article demonstrates the widespread use of this concept and summarises the major issues, both theoretical and empirical, that must be confronted in order to provide a credible estimate of a VSL. The article concludes with an application of these issues to a particular study of speed limits and highway safety. Copyright 2006 Royal Economic Society.