September 14, 2019

Putting a Price on Human Life

“One of the unloveliest ideas in economics goes by the name “value of a statistical life” — VSL for short. In the U.S. government, the current value of a human life is about $10 million.

That means that if a highway safety regulation would save 10 lives, it is worth $100 million — a figure that must be weighed against the regulation’s cost.

Because the government’s decisions often depend on the outcome of cost-benefit analysis, the VSL is important. It helps determine whether and when people will be protected from dirty air, dangerous workplaces, unsafe drinking water and unhealthy food.

A lot of people rebel against the idea of assigning a monetary value to a human life. In a provocative new book, the New York Times editorial writer Binyamin Appelbaum associates that idea with an assortment of others that he abhors, and through which economists have (in his view) contributed to rise of intolerable inequality.”

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