Last week, word got out that the EPA had reduced its estimate of the value of a human life. The EPA maintains such estimates so that it can perform a cost-benefit analysis of new regulations. (Other regulatory agencies calculate their own estimates.) With this update, the value of a human life slipped from $8.04 million to $7.22 million.
The linked article does not make the reasons for the change clear; instead it offers an explanation for how the number is calculated:
But how do you put a dollar value on a life, even in a generic sense?Whether the change came about as a result of ...er... suggestions from supervisors remains to be seen. (There definitely has been a record of political interference at the EPA.) Several environmentalists cited in the article thought that it would result in weaker air and water quality regulations. The good news is that there is not much time left to make trouble, and any regulatory changes in the next few months can be overturned in January.
It wouldn't work for researchers to survey Americans at gunpoint and ask how much they would pay not to die. Instead, an unlikely academic field has grown up to extrapolate life's value from the everyday decisions of average Americans.
Researchers try to figure out how much money it takes for people to accept slightly bigger risks, such as a more dangerous job. They also look at how much people will pay to make their daily risks smaller -- such as buying a bike helmet or a safer car.
"How much are you willing to pay for a small reduction . . . in the probability that you will die?" asked Joe Aldy, a fellow at the D.C.-based think tank Resources for the Future.
The rest is more or less multiplication: If someone will accept a 1-in-10,000 chance of death for $500, then the value of life must be 10,000 times $500, or $5 million.
Here is Stephen Colbert's inimitable commentary on the reduction.