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15 July 2008

The Price Of Life


The EPA recently reduced the value of a statistical life by 11%. Your life is now only worth $6.9M to that government agency. This number is used in cost/benefit analysis to determine how many lives would need to be saved in order to justify the cost of a regulation. So now, with the lower value, more people would need to be at risk of death in order for a change be deemed cost-effective.

What I find disturbing is the method used to calculate it:

The EPA figure is not based on people's earning capacity, or their potential contributions to society, or how much they are loved and needed by their friends and family -- some of the factors used in insurance claims and wrongful-death lawsuits.
Instead, economists calculate the value based on what people are willing to pay to avoid certain risks, and on how much extra employers pay their workers to take on additional risks. Most of the data is drawn from payroll statistics; some comes from opinion surveys.

So basically the Bush administration's anti-regulation folks are being rewarded for having made the economy go down the shitter, right? People are so desperate for jobs that they're willing to do even risky ones at low wages and, because of that, the companies providing the risky jobs at low wages get to avoid regulations?

Unfogged 7/14/08 8:11 AM Becks

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