Decreasing “Value” Of American Life
| July 15, 2008 | Posted by Roshawn Watson under Uncategorized |
By: Roshawn Watson
According to the Environmental Protection Agency, the statistical value of a person’s life is now $6.9 million, nearly $1 million less than what it was 5 years ago. The recalculation is due to numerous cost-benefit analyses.
Image Credit: TW Collins
Note that cost-benefit analysis aid in decision-making by weighing a rule or regulation’s expected costs against the total benefit of one or more actions, allowing for selection of the most profitable option.
The EPA recalculation is important because government agencies, i.e. the EPA, will assess the life-saving benefit of a particular rule and regulation compared to the costs. Rules that costs more than the value of the collective lives it saves will not be adopted. Consider the fictional example from the Associated Press.
“a hypothetical regulation that costs $18 billion to enforce but will prevent 2,500 deaths. At $7.8 million per person (the old figure), the lifesaving benefits outweigh the costs. But at $6.9 million per person, the rule costs more than the lives it saves, so it may not be adopted. “
Unlike insurance claims and lawsuits, the EPA’s calculation is not based on earning capacity or future contributions to society. Rather, it is based on what people are willing to pay to avoid certain risks and how much more employees pay their employees to assume certain risk. For example, a window-washer of a sky-scrapper would typically get paid a lot more than the window-washer who barely uses a ladder.
Critics of the EPA’s reduction point out that (1) as people become more affluent (collectively and individually), the statistical value of his or her life should go up, (2) no study directly supports the claims that Americans are willing to pay less to reduce risk, and (3) the recalculation could be politically-motivated in an attempt to pass new rules and regulations more difficult.
As implied by the criticisms, the methodologies and data interpretations are not universally accepted, but for texture, note that the EPA currently places the highest value on life compared to other governmental agencies.
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Copyright 2008, Roshawn Watson, Pharm.D. All Rights Reserved.
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i would think decreasing the value of life makes it more difficult to pass laws. with the decrease in value-greater preventable death counts are required to it in order to make it worthwhile. meaning a law is even less likely to be enacted
You are right. I meant making it more difficult.