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

Listed author(s):
  • H. Spencer Banzhaf

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.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.28.4.213
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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 28 (2014)
Issue (Month): 4 (Fall)
Pages: 213-226

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Handle: RePEc:aea:jecper:v:28:y:2014:i:4:p:213-26
Note: DOI: 10.1257/jep.28.4.213
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  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, 03.
  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, 02.
  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, Diciembre.
  9. 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.
  10. Mirowski,Philip, 2002. "Machine Dreams," Cambridge Books, Cambridge University Press, number 9780521775267, Diciembre.
  11. Charles Hitch, 1955. "An Appreciation of Systems Analysis," Operations Research, INFORMS, vol. 3(4), pages 466-481, November.
  12. 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.
  13. Selma J. Mushkin, 1962. "Health as an Investment," Journal of Political Economy, University of Chicago Press, vol. 70, pages 129-129.
  14. repec:reg:rpubli:282 is not listed on IDEAS
  15. Charles Hitch, 1953. "Sub-Optimization in Operations Problems," Operations Research, INFORMS, vol. 1(3), pages 87-99, May.
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