Volume 25, Number 2 (Spring) 1990
Hersch, Joni and W. Kip Viscusi. 1990. "Cigarette Smoking, Seatbelt Use, and Difference in Wage-Risk Tradeoffs." Journal of Human Resources 25(2):202-227.
Using an original data set that allowed us to measure the job risk perceived by individuals as well as smoking and seatbelt use, we found that cigarette smokers and nonseatbelt wearers receive a lower compensating differential for risk than nonsmokers and seatbelt wearers. While workers on average have an implicit value of a nonfatal lost workday injury of $48,000, this value is $81,000 for nonsmoking workers who wear seatbelts, with no evidence of a positive valuation for workers who smoke and do not wear a seatbelt. Our results imply that individual differences in other health-related activities are influential determinants of the observed wage-risk tradeoff. We also found significant compensating differentials for several nonrisk job attributes.
Joni Hersch is an associate professor of economics at the University of Wyoming and W. Kip Viscusi is George G. Allen Professor of Economics at Duke University. The authors acknowledge Garth Morrisette, who assisted in administering the survey, Michael J. Moore, who provided invaluable suggestions regarding the material in Section 5, and an anonymous referee, who also provided helpful comments.
© 2002 by the Board of Regents of the University of Wisconsin System
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