Resource title

The value of a statistical life under ambiguity aversion

Resource image

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Resource description

We show that ambiguity aversion increases the value of a statistical life as soon as the marginal utility of wealth is higher if alive than dead. The intuition is that ambiguity aversion has a similar effect as an increase in the perceived baseline mortality risk, and thus operates as the dead anyway effect. We suggest, however, that ambiguity aversion should usually have a modest effect on the prevention of ambiguous mortality risks within benefit-cost analysis, and can hardly justify the substantial ambiguity premium apparently embodied in environmental policy-making.

Resource author

Nicolas Treich

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26336

Resource license

Adapt according to the presented license agreement and reference the original author.