Models for estimating discount rates for long-term health risks using labor market data

Michael J. Moore*, W. Kip Viscusi

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

76 Scopus citations

Abstract

This article utilizes evidence from job choices involving fatality risks to estimate individual discount rates for adverse health outcomes. The study compares the results from five distinct models for estimating discount rates from labor market data. The estimated discount rates range from 1% to 14% with confidence intervals that usually include financial market rates for the same period. This result, and consistent findings of significant compensating differentials for fatality risk, provide strong support for life-cycle models of individual rationality in the choice of job risks. Discounted value-of-life estimates are also developed and compared to the crosssection estimates that are more prevalent in the literature.

Original languageEnglish (US)
Pages (from-to)381-401
Number of pages21
JournalJournal of Risk and Uncertainty
Volume3
Issue number4
DOIs
StatePublished - Dec 1990
Externally publishedYes

Keywords

  • discount rates
  • labor market data
  • rationality
  • value-of-life estimates

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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