The theory of compensating wage differentials states that a worker will receive a wage premium for undesirable or dangerous work conditions, all else being equal. This study uses Multiple Regression Analysis based on the Hedonic Pricing Model to test this theory in a single industry. Two common problems encountered when testing for compensating wage differentials are variance in work conditions between industries and the biased reporting of those work conditions. The effect of these variables is reduced when testing the truck driving industry; many of the conditions that truck drivers face are quantifiable and collected by third parties.
