New Estimates of the Value of a Statistical Life Using Air Bag Regulations as a Quasi-Experiment

Abstract

Due to Federal regulations, automobile air bag availability was a model-specific discontinuous function of model year for used vehicles in the 1990s and early 2000s. I use these discontinuities and the gradual increase in the supply of air bags to trace out the demand curve for air bags and the implied distribution of the Value of a Statistical Life (VSL) across consumers. While imprecise, my preferred estimates indicate that the median VSL is between $7 million and $13 million, but that a sizable portion of consumers placed negative values on air bags, probably due to distrust of the technology.

Keywords: value of a statistical life, VSL, air bags, automobile, used car, regulation, quasi-experiment

JEL Classification: J17, R41, I18, K32, L62, D12, D61, H40