Psychological features affecting valuation of life

Economists have studied a variety of consumer, technological and workplace hazards to determine the value of life. These studies have produced widely divergent results. This paper investigates whether or not cognitive characteristics of different hazards may explain part of the diversity. Our findings are that while catastrophic hazards such as nuclear accidents engender heightened psychological fear and a high willingness-to-pay to reduce risks, the same is not true for more everyday hazards. Small sample size and dubious source data may be responsible for this counter-intuitive result, which suggests there is a need for additional joint work by psychologists and economists.