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Extending the Domain of the Value of a Statistical Life

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  • Viscusi, W. Kip

Abstract

The value of a statistical life (VSL) establishes the money-risk tradeoff that U.S. government agencies have used for four decades to monetize the mortality reduction benefits of proposed regulations. This article advocates the adoption of the VSL more generally both for policy evaluation purposes and for setting the magnitude of regulatory sanctions involving fatalities. Agencies currently employ the inconsistent practice of using the VSL to set the stringency of regulations, while at the same time, reverting to very low monetary values of sanctions for violations that result in fatalities. Reform of penalty levels to reflect the VSL will require increasing the current statutory limits on regulatory penalties. Revamping the penalty structure also will incentivize private companies to incorporate the VSL in their corporate risk analyses. Government agencies, including those concerned with national defense, similarly could profit from greater expansion of the use of the VSL in policy decisions.

Suggested Citation

  • Viscusi, W. Kip, 2021. "Extending the Domain of the Value of a Statistical Life," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 12(1), pages 1-23, April.
    • Handle: RePEc:cup:jbcoan:v:12:y:2021:i:1:p:1-23_1
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    Citations

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    Cited by:

    1. Thomas J. Kniesner & W. Kip Viscusi, 2023. "Compensating Differentials for Occupational Health and Safety Risks: Implications of Recent Evidence," Research in Labor Economics, in: 50th Celebratory Volume, volume 50, pages 83-116, Emerald Group Publishing Limited.
    2. Patrick Carlin & Brian E. Dixon & Kosali I. Simon & Ryan Sullivan & Coady Wing, 2022. "How Undervalued is the Covid-19 Vaccine? Evidence from Discrete Choice Experiments and VSL Benchmarks," NBER Working Papers 30118, National Bureau of Economic Research, Inc.
    3. W. Kip Viscusi & Robert J. Cramer, 2023. "How regulations undervalue occupational fatalities," Regulation & Governance, John Wiley & Sons, vol. 17(1), pages 250-271, January.
    4. 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.

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