Value of statistical life and changes in ambiguity

Courbage, Christophe (Haute école de gestion de Genève, HES-SO // Haute Ecole Spécialisée de Suisse Occidentale)

This paper investigates the effect of changes in ambiguity on the value of statistical life (VSL) under the smooth ambiguity model developed by Klibano, Marinacci and Mukerji (2005). Changes in ambiguity over the mortality risk are expressed through the specific concept of stochastic dominance of order n defined by Ekern (1980). We provide sufficient conditions on the individual attitudes towards ambiguity such that both an ambiguity-averse and an ambiguity-seeking individual modify their VSL in the face of changes in ambiguity. These results have important implications for cost-benefit applications on the risk of human life.


Keywords:
Conference Type:
full paper
Faculty:
Economie et Services
School:
HEG - Genève
Institute:
CRAG - Centre de Recherche Appliquée en Gestion
Subject(s):
Economie/gestion
Publisher:
Niort, France
Date:
Niort
France
2016
Pagination:
16 p.
Published in:
Proceedings of the 3rd International Conference on economic and financial risks
Appears in Collection:



 Record created 2016-08-18, last modified 2019-06-11

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