Effect of Income Heterogeneity on Valuation of Mortality Risk in Taiwan: An Application of Unconditional Quantile Regression Method.

Je-Liang Liou

doi:10.3390/ijerph16091620

Abstract

According to theory and existing empirical results, heterogeneity in personal characteristics, with income variation being one of them, affects the marginal willingness to pay (WTP) for reducing fatal risk. In this study, the effect of income heterogeneity on the value of statistical life (VSL) in Taiwan through unconditional quantile regression analysis using the data collected by the “Manpower Utilization Survey” is investigated. The results of this empirical study show that the hedonic wage function that was constructed using empirical data from Taiwan was in line with the general form of non-linear function rather than the semi-log function that has been often used in previous studies, which should have great impact on the estimation of the VSL. The empirical results also show that the estimated VSL of Taiwanese labor varied with the difference in wages, which needs to be taken into account when discussing the public policies using VSL.

Highlights

In recent years, with the limited national budget, cost-benefit assessment (CBA) has been adopted to examine the efficiency of public construction plans and management policies, and it is becoming an important reference for making decisions on different plans or policies by public agencies
hedonic wage method (HWM) establishes the hedonic wage function through the wage-risk tradeoff relationship, in which the assessments of the changes in fatal risks by job seekers are inferred through the wage differences that correspond to the fatal risks that are faced by employees of different occupations, which are used as the basis for value of statistical life (VSL) estimation
In the settings of HWM, it is usually assumed that the wage has a functional relationship between the job and the personal characteristics, i.e., the wage (Wi ) of a particular sample i can be expressed as a function that various variables, such as personal characteristics (Si, e.g., socio-economic background features, such as education level, gender, age, work experience, etc.), job characteristics (Ni, e.g., occupation, work location, etc.), fatal risk of the job (FRi ), nonfatal injury risk of the job (NFRi ), etc., affect, as shown in Formula (1)

Summary

Introduction

With the limited national budget, cost-benefit assessment (CBA) has been adopted to examine the efficiency of public construction plans and management policies, and it is becoming an important reference for making decisions on different plans or policies by public agencies. The construction plans or management policies that were implemented by public agencies involve external influences that are often ignored by the private sector. Among these influencing factors, the changes in the impact of risks of health or death are often the focus of assessment programs in the public sector [1]. Based on past assessment experience, the benefits or costs that are generated by VSL in the aforementioned public construction or management decisions often account for more than

Methods

Results

Conclusion