Doubling the estimated value of life: Results using new occupational fatality data

Using a new series of data on occupational fatalities compiled by the National Institute for Occupational Safety and Health, the authors reassess value-of-life calculations based on labor market tradeoffs between fatality risks and wages. The new data are less subject to the problems of measurement error that plague previously used measures of risk. They indicate higher risk levels than previously believed and a significantly different composition of risk levels within industries. The more comprehensive risk data yield value-of-life estimates of $5 million or more—at least twice as large as estimates obtained using the Bureau of Labor Statistics risk data employed in previous studies.     

The value of life in legal contexts: survey and critique

Value of life issues traditionally pertain to insurance of thelosses of accident victims, for which replacement of the economicloss is often an appropriate concept. Deterrence measures ofthe value of life focus on risk-money tradeoffs involving smallchanges in risk. Using market data for risky jobs and productrisk contexts often yields substantial estimates of the valueof life in the range of $3 million to $9 million. These estimatesare useful in providing guidance for regulatory policy and assessmentsof liability. However, use of these values to determine compensation,known as hedonic damages, leads to excessive insurance.     

The devaluation of life

The US Environmental Protection Agency (EPA) has been the target of two recent controversies involving the devaluation of life: the 2003 use of a senior discount for the value of statistical life for people over age 65, and the 2008 downward reassessment of the value of statistical life by the EPA Air Office. Even though these new values of statistical life were still among the highest used in the Federal government, there was a strong negative public reaction to each. The public outcry over the EPA policies appears to have stemmed from an irrational response to decreases in the value of statistical life. Proposed Congressional legislation that purportedly seeks to reform the valuations would politicize benefit assessments. A sounder approach is to establish a peer‐reviewed scientific advisory panel to advise agencies on the value of statistical life.     

Voter‐weighted environmental preferences

This article examines the political economy of preferences with respect to the environment using a new stated preference survey that presents the first benefit values for national water quality levels. The mean valuation greatly exceeds the median value, as the distribution of valuations is highly skewed. The study couples the survey valuations with unique and extensive information on respondent voting patterns. Preferences of registered voters are similar to the preferences of the population at large, but median voters value water quality more than nonvoters. The strongest contrast related to voter‐weighted preferences is among voters for different candidates, as those who voted for Gore in the 2000 presidential election have the highest environmental values. © 2009 by the Association for Public Policy Analysis and Management.