The value of a statistical life (VSL) is a key parameter in the analysis of government policy. Most policy decisions are made under ambiguity. This paper studies the effect of changes in ambiguity perception on the VSL. We propose a definition of increases in ambiguity perception based on Ekern’s (1980) definition of increases in risk. Ambiguity aversion alone is not sufficient to lead to an increase in the VSL when the decision maker perceives more ambiguity. Our results highlight the importance of higher order ambiguity attitudes, particularly ambiguity prudence.
|Journal||Journal of Risk and Uncertainty|
|Publication status||Published - 24 Apr 2019|
Bibliographical noteFunding Information:
We are grateful to Kip Viscusi, Aur?lien Baillon, and an anonymous reviewer for their comments on earlier versions of this paper. We thank Christina Stoddard for her careful proofreading. This research has benefited from the financial support of IDEXLYON from Universit? de Lyon (project INDEPTH) within the Programme Investissements d?Avenir (ANR-16-IDEX-0005).
© 2019, The Author(s).