In your second consulting job, you have been trying to estimate the WTA risk on the part of workers. You have gathered data on a variety of blue-collar occupations ranging from clerical work to truck driving to coal mining. Controlling for age, gender, education, work experience, and race, you have uncovered the following relationship:

1. What is your estimate of the “value of a statistical life”? What does this mean?
2. Why might this value be a poor estimate of the value placed on lives saved from pollution reduction (give three reasons)?

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Extra wage per year $2,500 $2,000 $1,500 $1,000 $500 $0 01 2 3 4 5 Mortality risk (out of 10,000) 6