Valuing Life as an Asset, as a Statistic, and at Gunpoint

Rationalizing the stark differences between the Human Capital (HK) and the Statistical Values (VSL) of a human life is complicated by the absence of common foundations. We solve a human capital investment model with longevity risk to characterize the HK. The associated indirect utility yields the willingness to pay (WTP) against mortality; the marginal WTP solves the VSL. Indifference between life and certain death characterizes the limiting WTP and provides a Gunpoint Value (GPV). A structural estimation reveals similar HK (300 K$) and GPV (251 K$) and explains a much larger VSL (4.98 M$) by a strongly concave WTP.