Title

Economic Survey of the Monetary Value Placed on Human Life by Government Agencies in the United States of America

Student Co-author

CMC Undergraduate, HMC Undergraduate

Document Type

Article

Department

Economics (CMC), Engineering (HMC)

Publication Date

2010

Abstract

This article presents the methods used by U.S. government agencies to assign a monetary value to human life as mandated by three Executive Orders. Since 1978, all regulations with an impact greater than $100 million require a supporting analysis. By accounting for inflation over the past 28 years, this threshold has effectively been reduced by 2.5 to 3.0 times in real dollars. Monetary values assigned to a life directly impact the approval of government proposed projects through cost-benefit and cost-effectiveness analysis. Two major methods are used to determine the value of a life. First, the value of a statistical life emphasizes that monetary value is not directly placed on life but rather on methodologies to prevent the statistical loss of life. Second, willingness to pay is the monetary value that an individual would pay to prevent the loss of their life. Previous works cite values of life ranging from $0.1 to $86.8 million (in year 2006 dollars U.S.). The values of a human life used by U.S. government agencies have significantly changed over time. The values used by government agencies in 2006 are as follows: the Department of Transportation and the Federal Aviation Administration — $3.0 million, the Environmental Protection Agency — $6.1 million, the Food and Drug Administration — $6.5 million, and the Consumer Products Safety Commission—$5.0 million. We believe that a single value should be used across all U.S. government agencies to provide consistency and fairness. We also believe that the $100 million minimum regulation threshold should be increased to account for inflation.

Rights Information

© 2010 Taylor and Francis