IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v28y2014i4p213-26.html
   My bibliography  Save this article

Retrospectives: The Cold-War Origins of the Value of Statistical Life

Author

Listed:
  • H. Spencer Banzhaf

Abstract

This paper traces the history of the "Value of Statistical Life" (VSL), which today is used routinely in benefit-cost analysis of life-saving investments. The "value of statistical life" terminology was introduced by Thomas Schelling (1968) in his essay, "The Life You Save May Be Your Own." Schelling made the crucial move to think in terms of risk rather than individual lives, with the hope to dodge the moral thicket of valuing "life." But as recent policy debates have illustrated, his move only thickened it. Tellingly, interest in the subject can be traced back another twenty years before Schelling's essay to a controversy at RAND Corporation following its earliest application of operations research to defense planning. RAND wanted to avoid valuing pilot's lives but the Air Force insisted they confront the issue. Thus, the VSL is not only well acquainted with political controversy; it was born from it.

Suggested Citation

  • H. Spencer Banzhaf, 2014. "Retrospectives: The Cold-War Origins of the Value of Statistical Life," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 213-226, Fall.
    • Handle: RePEc:aea:jecper:v:28:y:2014:i:4:p:213-26
    Note: DOI: 10.1257/jep.28.4.213
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.28.4.213
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. H. Spencer Banzhaf, 2009. "Objective or Multi-Objective? Two Historically Competing Visions for Benefit-Cost Analysis," Land Economics, University of Wisconsin Press, vol. 85(1), pages 3-23.
    2. Orley Ashenfelter, 2006. "Measuring the Value of a Statistical Life: Problems and Prospects," Economic Journal, Royal Economic Society, vol. 116(510), pages 10-23, March.
    3. Broome, John, 1978. "Trying to value a life," Journal of Public Economics, Elsevier, vol. 9(1), pages 91-100, February.
    4. Roland N. McKean, 1963. "Cost-Benefit Analysis And British Defence Expenditure," Scottish Journal of Political Economy, Scottish Economic Society, vol. 10(1), pages 17-35, February.
    5. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    6. James Hammitt & Nicolas Treich, 2007. "Statistical vs. identified lives in benefit-cost analysis," Journal of Risk and Uncertainty, Springer, vol. 35(1), pages 45-66, August.
    7. Esther-Mirjam Sent, 2007. "Some like it cold: Thomas Schelling as a Cold Warrior," Journal of Economic Methodology, Taylor & Francis Journals, vol. 14(4), pages 455-471.
    8. Mirowski,Philip, 2002. "Machine Dreams," Cambridge Books, Cambridge University Press, number 9780521772839.
    9. Selma J. Mushkin, 1962. "Health as an Investment," NBER Chapters, in: Investment in Human Beings, pages 129-157, National Bureau of Economic Research, Inc.
    10. H. Spencer Banzhaf, 2010. "Consumer Surplus with Apology: A Historical Perspective on Nonmarket Valuation and Recreation Demand," Annual Review of Resource Economics, Annual Reviews, vol. 2(1), pages 183-207, October.
    11. Mirowski,Philip, 2002. "Machine Dreams," Cambridge Books, Cambridge University Press, number 9780521775267.
    12. Charles Hitch, 1955. "An Appreciation of Systems Analysis," Operations Research, INFORMS, vol. 3(4), pages 466-481, November.
    13. Trudy Ann Cameron, 2010. "Euthanizing the Value of a Statistical Life," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 161-178, Summer.
    14. Selma J. Mushkin, 1962. "Health as an Investment," Journal of Political Economy, University of Chicago Press, vol. 70(5), pages 129-129.
    15. repec:reg:rpubli:282 is not listed on IDEAS
    16. Charles Hitch, 1953. "Sub-Optimization in Operations Problems," Operations Research, INFORMS, vol. 1(3), pages 87-99, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Weber, Shlomo & Castaneda Dower, Paul & Markevich, Andrei, 2018. "The Value of a Statistical Life in a Dictatorship: Evidence from Stalin," CEPR Discussion Papers 12814, C.E.P.R. Discussion Papers.
    2. Agamoni Majumder & S. Madheswaran, 2017. "Compensating wage differential and value of statistical life: a meta-analysis," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 60(4), pages 527-548, December.
    3. Dockins, Chris & Maguire, Kelly & Newbold, Steve & Simon, Nathalie & Krupnick, Alan & Taylor, Laura, 2018. "What’s in a Name? A Systematic Search for Alternatives to “Value of Statistical Life”," RFF Working Paper Series 18-14, Resources for the Future.
    4. Foudi, Sébastien & Spadaro, Joseph V. & Chiabai, Aline & Polanco-Martínez, Josué M. & Neumann, Marc B., 2017. "The climatic dependencies of urban ecosystem services from green roofs: Threshold effects and non-linearity," Ecosystem Services, Elsevier, vol. 24(C), pages 223-233.
    5. Majumder, Agamoni & Madheswaran, S., 2016. "Value of statistical life: A meta analysis with mixed effects regression model," Working Papers 362, Institute for Social and Economic Change, Bangalore.
    6. Banzhaf, H. Spencer, 2016. "Constructing markets: environmental economics and the contingent valuation controversy," MPRA Paper 78814, University Library of Munich, Germany.
    7. Jessica Carrick-Hagenbarth & Eric Edlund & Avanti Mukherjee, 2023. "Analysis of Hybrid Epidemiological-Economic Models of COVID-19 Mitigation Policies," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 49(4), pages 585-612, October.
    8. Zubova, Ekaterina, 2022. "Value of statistical life in Russia: Estimates based on panel microdata for 2010–2020," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 65, pages 45-64.
    9. Nathalie B Simon & Chris Dockins & Kelly B Maguire & Stephen C Newbold & Alan J Krupnick & Laura O Taylor, 2019. "Policy Brief—What’s in a Name? A Search for Alternatives to “VSL”," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(1), pages 155-161.
    10. Abraham, Rosa, 2016. "Informal employment in India: An analysis of forms and determinants," Working Papers 363, Institute for Social and Economic Change, Bangalore.
    11. Wiktor L. (Vic) Adamowicz, 2016. "Economic Analysis and Species at Risk: Lessons Learned and Future Challenges," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(1), pages 21-32, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Henrik Andersson & Nicolas Treich, 2011. "The Value of a Statistical Life," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 17, Edward Elgar Publishing.
    2. Scotton Carol R., 2013. "New risk rates, inter-industry differentials and the magnitude of VSL estimates," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(1), pages 39-80, March.
    3. Doucouliagos, Chris & Stanley, T.D. & Giles, Margaret, 2012. "Are estimates of the value of a statistical life exaggerated?," Journal of Health Economics, Elsevier, vol. 31(1), pages 197-206.
    4. Cameron, Trudy Ann & DeShazo, J.R., 2013. "Demand for health risk reductions," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 87-109.
    5. Dionne, Georges & Lebeau, Martin, 2010. "Le calcul de la valeur statistique d’une vie humaine," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(4), pages 487-530, décembre.
    6. Courard-Hauri David & Lauer Stephen A., 2012. "Taking "All Men Are Created Equal" Seriously: Toward a Metric for the Intergroup Comparison of Utility Functions Through Life Values," Journal of Benefit-Cost Analysis, De Gruyter, vol. 3(3), pages 1-30, August.
    7. Maureen Cropper & James K. Hammitt & Lisa A. Robinson, 2011. "Valuing Mortality Risk Reductions: Progress and Challenges," Annual Review of Resource Economics, Annual Reviews, vol. 3(1), pages 313-336, October.
    8. Kuchler, Fred & Golan, Elise H., 1999. "Assigning Values To Life: Comparing Methods For Valuing Health Risks," Agricultural Economic Reports 34037, United States Department of Agriculture, Economic Research Service.
    9. Weber, Shlomo & Castaneda Dower, Paul & Markevich, Andrei, 2018. "The Value of a Statistical Life in a Dictatorship: Evidence from Stalin," CEPR Discussion Papers 12814, C.E.P.R. Discussion Papers.
    10. Castañeda Dower, Paul & Markevich, Andrei & Weber, Shlomo, 2021. "The value of a statistical life in a dictatorship: Evidence from Stalin," European Economic Review, Elsevier, vol. 133(C).
    11. Lurås, Hilde, 2009. "A healthy lifestyle: The product of opportunities and preferences," HERO Online Working Paper Series 2001:11, University of Oslo, Health Economics Research Programme.
    12. Claus Dierksmeier, 2011. "The Freedom–Responsibility Nexus in Management Philosophy and Business Ethics," Journal of Business Ethics, Springer, vol. 101(2), pages 263-283, June.
    13. James K. Hammitt, 2020. "Valuing mortality risk in the time of COVID-19," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 129-154, October.
    14. I. Hakan Yetkiner, 2006. "Saglik ile Buyume," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 6(2), pages 83-91.
    15. Jun-Yi Zheng & Li-Xia Luan & Mei Sun, 2022. "Does the National Fitness Policy Promote National Health?—An Empirical Study from China," IJERPH, MDPI, vol. 19(15), pages 1-20, July.
    16. Davide Fiaschi & Andrea Mario Lavezzi & Angela Parenti, 2020. "Deep and Proximate Determinants of the World Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(3), pages 677-710, September.
    17. Azmat Gani, 2009. "Some Aspects of Communicable and Non-communicable Diseases in Pacific Island Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 91(2), pages 171-187, April.
    18. Yingzhu Yang & Rong Zheng & Lexiang Zhao, 2021. "Population Aging, Health Investment and Economic Growth: Based on a Cross-Country Panel Data Analysis," IJERPH, MDPI, vol. 18(4), pages 1-16, February.
    19. Sandra Silva & Aurora Teixeira, 2009. "On the divergence of evolutionary research paths in the past 50 years: a comprehensive bibliometric account," Journal of Evolutionary Economics, Springer, vol. 19(5), pages 605-642, October.
    20. Paul J. J. Welfens, 2020. "Macroeconomic and health care aspects of the coronavirus epidemic: EU, US and global perspectives," International Economics and Economic Policy, Springer, vol. 17(2), pages 295-362, May.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • N42 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: 1913-

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:28:y:2014:i:4:p:213-26. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.