Measurement of Multi-attribute VSL considering Constant Relative Risk Aversion based on Happiness Survey in Japan

Abstract

 In order to consider theoretically-consistent value of a statistical life (VSL) for a mortality risk, we conduct the happiness survey through the internet-based questionnaire survey, estimate a happiness function using an ordered response model, and measure some VSLs according to attributes. The findings in this study are shown below. (1) When measured by age, as shown by earlier studies, VSL increased in direct proportion to age 20s, 30s, 40s and 50s, but it decreased in age 60s. VSL were found to be the inverse U-shape. (2) In case that the value of a constant relative risk aversion was 1 (logarithm utility function), the average VSL was estimated as about 6.912 million yen. On the other hand, in case that the value of a constant relative risk aversion was 1.260, the average VSL was estimated as about 73.521 million yen. (3) It implies that some of attributes (e.g., with or without children, grandchildren, or spouse, the number of households, and residential area) had impacts on VSL.