Ao Yu January 2024
Draft prepared and pending submission
Willingness to Pay for Safety: Evidence from the Automobile Market in China
In response to a recent revision in China’s passenger vehicle standards, all new cars sold in the country are mandated to be equipped with Anti-lock Brake Systems (ABS) since 2018. Due to this policy shift, ABS availability is a vehicle stub-specific discontinuous function of model year. This study leverages this discontinuity to evaluate the willingness to pay (WTP) for safety among Chinese consumers. The primary findings indicate that, on average, Chinese car buyers demonstrate a WTP of approximately $300 for the inclusion of ABS in their vehicles. The derived value per statistical life (VSL) based on WTP stands at approximately $8 million. Notable variations exist across different provinces in China. This paper provides the first empirical evidence on the VSL of Chinese citizens derived from their car purchasing decisions, thereby providing an important parameter for cost-benefit analyses.
Ao Yu August 2023
Submitted
The Value Per Statistical Life in China: Evidence from Medical Expenditure of Senior Citizens
In this study, I seek to estimate the marginal return of medical expenditure on the mortality rate of seniors. Estimates based on instrumental variable estimators indicate that on average, every additional 1,000 CNY of medical expenditure decreases mortality rate by 2.6%. Under certain assumptions, these figures can be used to compute the value per statistical life (VSL) for Chinese senior citizens. The mean VSL at age 65 is around $100,000 (2010 U.S. dollars) and the mean VSL decreases to $6,000 by age 90. The decreasing relationship between the estimated VSL and age is consistent and precisely estimated until age 115. This study provides the first empirical evidence under the revealed-preference framework on the VSL of Chinese senior citizens, an important parameter in cost-benefit analyses.
Ao Yu March 2022
Draft prepared and pending submission
The Value Per Statistical Life: Evidence from Panel Data in China
I use the compensating wage differential method to estimate the trade-offs between wage and fatality risks in China. Based on recent Chinese labor market data, I find positive and statistically significant wage premium for fatality risk for Chinese workers who work in relatively dangerous sectors. My panel estimates suggest fatality risk elasticity of income to be about 0.07, and the implied Value of a Statistical life for the average respondent is approximately $1.7 million USD for the working population, marking a large increase of Value of a Statistical life in China over the past two decades.
With Jennifer Ifft
The Energy Journal, Vol. 42 Issue 3
The Value Per Statistical Life: Evidence from Panel Data in China
Future conventional and renewable energy production will predominantly occur on farmland, resulting in economic gains as well as potential negative externalities for farmland owners and rural communities. However there is limited research on the economic impact of energy production that takes place on farmland. This study uses the discrete change in expectations caused by the 2008 New York State moratorium on hydraulic fracturing to investigate the net impact of shale gas development on farmland values. We use a difference-in-differences empirical design with a hedonic pricing model. We find that the moratorium led to net economic losses for rural landowners in New York’s Southern tier, as reflected in farmland values dec
Other Publications & Writings
With Anna Alberini (2023), “The Value per Statistical Life: A Review of Recent Literature to Inform an Update of the Canada VSL”. Report prepared for Health Canada.
With Anna Alberini (Forthcoming), “Valuing Mortality Risk Reductions: Theory, Practice and Stated Preference Methods”, book chapter for “Handbook of Environmental Valuation” Edited by Tim Haab, Lala Ma and John Whitehead