Mia Ha - Problem Set 6 .docx

# Mia Ha - Problem Set 6 .docx - Mia Ha ECON 436 Problem Set...

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Mia Ha ECON 436 Problem Set # 6 1. 1. Vis cusi’s equation implies that the value of a statistic life varies with the level of risk, with workers in riskier jobs having a lower VSL. The reason why this result is consistent with economic theory is because the amount of money people are willing to pay for small changes in risk matters, and how much money they want to pay could show how willing they want to take the risks. People think about risks differently: those with less concerned about risks would not mind working in riskier jobs for lower pay, vice versa, those with higher concerned about risks would not mind doing so. With that in mind comes the conclusion that people doing riskier jobs are usually not so concerned about risks and therefore have lower values of a statistical life. 2. R = 0.118. The value of statistical life implied by Viscusi’s equation at this level of risk is: 3. With the equation, VSL for garbage collectors is: C/ “If we could measure individuals’ true willingness to pay, we would find that, other things equal, elderly people would have a higher VSLY than young people, but a lower VSL”. Let’s say

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• Fall '08
• Staff
• Ageism, Safe Drinking Water Act, VSL

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