The Human Capital (HK), and Statistical Life Values (VSL) differ sharply in their empirical pricing of a human life and lack a common theoretical background, to justify these differences. We first contribute to the theory, and measurement of life value by providing a unified framework to formally define, and relate the Hicksian willingness to pay (WTP) to avoid changes in death risks, the HK, and the VSL. Second, we use this setting to introduce a benchmark life value calculated at Gunpoint (GPV), i.e. the maximal WTP to avoid certain, instantaneous death. Third, we associate a flexible human capital model to the common framework to characterize the WTP and the three life valuations in closed-form. Fourth, our structural estimates of these solutions yield mean life values of 8.35 M$ (VSL), 421 K$ (HK) and 447 K$ (GPV). We confirm that the strong curvature of the WTP, rather than segmented frameworks, explains why the VSL is much higher than other values.
Keywords: Value of Human Life, Human Capital, Value of Statistical Life, Willingness to pay, Equivalent Variation, Mortality, Structural Estimation.
JEL Classification: J17, D91, G11.