What’s a Life Worth? Up to $9.1 Million, U.S. Agencies Say

We learn at a young age that every human life is priceless, but placing a dollar value on an individual life underpins the framework of federal safety regulations protecting workers and consumers.

The economic value assigned to a single person’s existence can help justify tougher regulations, by balancing the costs imposed by regulations against the money saved from the deaths that were prevented. And, as The New York Times reports, the dollar value of a life, in the government’s estimation, is rising.

After using a figure as low as $5 million during the administration of President George W. Bush, the Food and Drug Administration now says that a life is worth $7.9 million.

The Environmental Protection Agency has upped its standard for a life’s worth from $6.8 million to $9.1 million, and has made sounds about a further 50 percent increase in assessing the cost of smoking deaths. In justifying a new round of regulations, the Transportation Department recently set the value of a life at $6 million, a price tag that had previously been rejected as too high.

Despite the Obama administration’s  recently launched review of regulations costly to business, the value-of-life increases give federal agencies ammunition for stiffer regulatory measures. And while the increases have delighted consumer groups and unions, business organizations are upset.

“It looks like they just cooked the books — they just doubled the numbers,” Todd Spencer, executive vice president of the trucking trade group Owner-Operator Independent Drivers Association, told the Times.

Obama administration officials argue that the reassessments are in step with the latest research.

“This administration utilizes the best available science in assessing the benefits and costs of any potential regulation, drawing on widely accepted methodologies that have been in use for years,” said Meg Reilly, a spokeswoman for the Office of Management and Budget.

Many outside experts support the adjustments made by the Obama administration. “Agencies have been using numbers that I thought were just too low,” said W. Kip Viscusi, a Vanderbilt University economics professor who is a leading researcher in the area.

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One comment to “What’s a Life Worth? Up to $9.1 Million, U.S. Agencies Say”

  1. Mary Kay Kidwell

    I understand the statement that, “The economic value assigned to a single person’s existence can help justify tougher regulations . . .” But, along this road to forcing manufacturers to produce safer products, it seems that the entities on both sides of this issue have lost touch with the fact that they’re playing God with the lives of human beings. Both are guilty of “cooking the books.”
    Today the value of a human life is $6 million? $9 million? Somewhere in between? In 2005, Transportation Secretary Norman Mineta valued a human life at $544,000, based on improved auto safety technologies (full report at http://www.nhtsa.dot.gov/cars/rules/regrev/evaluate/).

    Ask anyone who has lost a child what that young life was worth? The answer won’t include a dollar amount.

    Costs vs lives saved is all about numbers and statistics, not about people. And, although this may be seen as the only method for determining (or justifying) government regulations, it has led to an unfair selection process in which the lives of one group are deemed more valuable than the lives of another.

    How is it that any government agency can determine the value of a life based on its own internal cost-vs-lives-saved formula? So, a life lost in a vehicle accident may be deemed less valuable than a life lost as a result of smoking. Playing God? Indeed!

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