The economic value of fatal and non-fatal occupational risks in Mexico City using actuarial- and perceived-risk estimates

Abstract

Compensating wage differentials are used to estimate marginal rates of substitution between income and both fatal and non‐fatal occupational‐injury risks in the Mexico City metropolitan area. Data are obtained by in‐person survey of almost 600 workers and include workers' perceived risks of fatal and non‐fatal occupational injury supplemented by actuarial‐risk estimates from government statistics. Results using both actuarial‐ and perceived‐risk estimates are reasonably consistent. Estimates of the value per statistical life are between US$235 000 and US$325 000 and estimates of the value per statistical non‐fatal injury are between US$3500 and US$11 000 (2002 US dollars). These values are much smaller than corresponding estimates for higher‐income countries but are compatible with the small number of prior estimates for lower‐income countries. Copyright © 2006 John Wiley & Sons, Ltd.