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Government agencies face difficult resource-allocation decisions when confronted with projects that will reduce risks of fatality. Evidence from individual behavior helps determine society's values for reducing risks. The most credible evidence is based on individuals' willingness to pay (or willingness to accept compensation) for small changes in risks. Studies of consumer behavior are limited, but more evidence is available relating wages to job risks. Contingent valuation studies reinforce the wage-risk implications, leading to a range of values that can be compared with the costs of proposals to reduce fatal risks.
Fisher et al. (Sun,) studied this question.
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