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| Value of Statistical Life× | Choice Experiment Valuation× | |
|---|---|---|
| Field | Economics | Economics |
| Family | Process / pipeline | Process / pipeline |
| Year of origin≠ | 2003 | 1974 |
| Originator≠ | Thomas Schelling; W. Kip Viscusi (empirical synthesis) | Random utility theory (McFadden); applied to valuation by Louviere & Hensher |
| Type≠ | Nonmarket valuation of mortality-risk reductions | Attribute-based stated-preference valuation method |
| Seminal source≠ | Viscusi, W. K., & Aldy, J. E. (2003). The value of a statistical life: a critical review of market estimates throughout the world. Journal of Risk and Uncertainty, 27(1), 5–76. DOI ↗ | McFadden, D. (1974). Conditional logit analysis of qualitative choice behavior. In P. Zarembka (Ed.), Frontiers in Econometrics (pp. 105–142). New York: Academic Press. ISBN: 9780127761503 |
| Aliases | VSL, Value of Statistical Life, Value per Statistical Life, Statistical Value of Life | Discrete Choice Experiment, DCE, Choice-Based Conjoint Valuation, Stated Choice Experiment |
| Related≠ | 3 | 2 |
| Summary≠ | The value of a statistical life (VSL) is the marginal rate of substitution between income and the probability of death — how much a population is collectively willing to pay for a small reduction in mortality risk, expressed per expected life saved. It is not the value of any identified person's life but the aggregate willingness to trade money for tiny risk changes: if 100,000 people each pay $100 to reduce their annual fatality risk by one in 100,000, society spends $10 million to prevent one statistical death, implying a VSL of $10 million. VSL is the central input to benefit-cost analysis of health, safety, and environmental regulations, and is estimated from labor-market wage-risk data (revealed preference) or from surveys (stated preference). | A choice experiment (discrete choice experiment, DCE) is an attribute-based stated-preference method that values non-market goods by describing them as bundles of characteristics and asking respondents to choose repeatedly among competing alternatives — one of which always carries a cost. Grounded in random utility theory, the choices are modeled with a discrete-choice model whose coefficients reveal the relative value of each attribute, and dividing any attribute's coefficient by the cost coefficient yields its marginal willingness to pay. |
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