The value of life: Real risks and safety-related productivity in the Himalaya

This paper estimates the value of a statistical life from commercial Himalayan expeditions. Because deaths occur with a fair amount of regularity, fatality rates are calculated for each mountain trail and are, hence, disaggregated measures of risk. Also, since the marginal product of labor in the industry is (in part) the marginal product of safety, our revenue measures may account for unobserved safety-related productivity of guides. Guide safety is explicitly observed by market participants, and is reflected in higher wages for safer guides. Our VSL estimates are about $5 M.

► We estimate the value of a statistical life from commercial Himalayan expeditions.
► Because deaths occur with a fair amount of regularity, fatality rates are calculated for each mountain trail and are, hence, disaggregated measures of risk.
► Since the marginal product of labor in the industry is (in part) the marginal product of safety, revenue may account for unobserved safety-related productivity of guides.
► Guide safety is explicitly observed by market participants, and is reflected in higher wages for safer guides.
► VSL estimates are about $5M.