Age, autos, and the value of a statistical life

The value of a statistical life (VSL) is used to assign a dollar value to the benefits of health and safety regulations. Many of those regulations disproportionately benefit older people, but most estimates of the VSL come from hedonic wage regressions with few older workers and no retirees. Using automobile purchase decisions, I estimate a VSL for individuals from the age of 18 up to the age of 85. Combining information on vehicle holdings and use, household attributes, used vehicle prices, crash test results, and yearly fatal accidents for each make, model, and vintage automobile, I calculate a separate willingness to pay for reduced mortality for different age groups. I find a significant inverted-U shape to the age-VSL function that ranges from $1.5 to $19.2 million (in 2009 dollars). The shape and magnitude of the vehicle-based age-VSL relationship corroborate labor market estimates and extend the age range of revealed preference evidence on the relationship between age and the VSL.