01-06 "The $6.1 Million Dollar Question"
What is the dollar value of saving a human life? Cost-benefit analysis of health and environmental regulation requires such a number, yet the concept raises numerous ethical and philosophical questions. There are good general reasons to reject the entire enterprise of monetizing life, and specific reasons to criticize the methods used to create such values. Valuations of life are most often based on analysis of the wage premium for risky jobs. Recent EPA analyses have relied on an extensive but dated database of wage-risk estimates, leading to an inflation-adjusted estimate of $6.1 million per life in 1999 dollars. A more appropriate interpretation of that database implies an estimate of at least $9-11 million. Some newer studies suggest much lower values - perhaps due to the weakened bargaining position of labor, a factor that has nothing to do with the value of environmental risk. The risk premium for working women is five times as great as for men, underscoring the impossibility of a "one size fits all" estimate of the value of a statistical life. Such values are not necessary for reasonable decision-making about how to reduce fatal risks.
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