4. The following equation relates the natural log of wages, W, to risk, R, and a vector of covariates, X:

lnW = bo +b1*R + C*X.

lnW is the natural log of W.Assume that W = 30,000, b1 = 0.15 and the change in risk being considered is a 1 in 3,000 increase in the probability of death. Note also that dW/W = 0.15.

A. What would an individual worker need to be paid to be willing to incur this 1 in 3,000 increased risk of death?

B. What is the statistical value of a life, based upon this wage equation?