Wednesday, July 16, 2008

The value of your life isn't what it used to be.

Are you feeling underappreciated depreciated of late?

An American Life Worth Less Today

The "value of a statistical life" is $6.9 million in today's dollars, the Environmental Protection Agency reckoned in May a drop of nearly $1 million from just five years ago....

Though it may seem like a harmless bureaucratic recalculation, the devaluation has real consequences. When drawing up regulations, government agencies put a value on human life and then weigh the costs versus the lifesaving benefits of a proposed rule. The less a life is worth to the government, the less the need for a regulation, such as tighter restrictions on pollution.

Consider, for example, 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...

... 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. According to the EPA, people shouldn't think of the number as a price tag on a life... EPA officials say the adjustment was not significant and was based on better economic studies....

At the same time that EPA was trimming the value of life, the Department of Transportation twice raised its life value figure. But its number is still lower than the EPA's.

The environmental agency traditionally has placed the highest value of life in government and still does, despite efforts by administrations to bring uniformity to that figure among all agencies.

Not all of EPA uses the reduced value. The agency's water division never adopted the change... [AP]