7.1 Revealed Preference and the Value of Statistical Life (VSL) - Bene\ufb01t-Cost Analysis VALUING BENEFITS REVEALED PREFERENCE METHODS Valuing

7.1 Revealed Preference and the Value of Statistical Life (VSL)

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Benefit-Cost AnalysisVALUING BENEFITS: REVEALED PREFERENCE METHODSValuing Benefits: Revealed Preference Methods
Revealed Preference and the Value of StaIsIcal LifeVALUING BENEFITS: REVEALED PREFERENCE METHODSValuing Benefits: Revealed Preference Methods
Revealed Preference ValuaIon MethodsMethodExamplesConceptual FrameworkTypes of Applica<onTravel CostPar9cipa9on inrecrea9on ac9vity andsite chosenHousehold produc9on,weak complementarityRecrea9on demandHedonicsProperty purchased orchoice of employmentDemand fordifferen9ated goodsProperty value andwage modelsDefensiveBehaviorExpenditures to avoidillness or deathHousehold produc9on,perfect subs9tutesMorbidity / mortalityCost ofIllnessExpenditures to treatillnessTreatment costsMorbidityFrom Boyle “Introduc9on to Revealed Preference MethodsValuing Benefits: Revealed Preference Methods
About the Ford Pinto…The 1971 Pintois number 22onTime’s 50 Worst Cars everValuing Benefits: Revealed Preference Methods
Revealed Preference Saves LivesIn May 1972, Lily Gray began a trip inher 1972 Pinto with her neighbor, 13-yr-old Richard Grimshaw. …The Pintostalled and rolled to a halt in the

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