Is it true, you think? According to an Associated Press report in the Chronicle recently, Environmental Protection Agency, EPA, says the "value of a statistical life" is $6.9 million in today's dollars the EPA reckoned in May -- a drop nearly $1 million from just five years ago. It is not only the American dollar that's losing value. A government agency has decided that an American life isn't worth what it used to be.
The AP discovered the change after a review of cost-benefits analyses over more than a dozen years. Although it may seem like a harmless bureaucratic recalculation, the devaluation has real consequences. When drawing up regualtions, government agencies put a value on human life and then weigh the costs against the lifesaving benefits of a proposed rule. The less a life is worth to the government, the less the need for a regulation, such as tighter restrictions on pollution. The EPA figure is not based on people's earning capacity, or their potential contributions to society, or how much they are loved and needed by their friends and family -- some of the factors used in insurance claims and wrongful-death lawsuits. Instead, economists calculate the value based on what people are willing to pay to avoid certain risks, and on how much extra employers pay their workers to take on additional risks. Most of the data is drawn from payroll statistics, some comes from opinion surveys.
The EPA made the changes in two steps: First, in 2004, the agency cut the estimated value of a life by 8 percent. Then, in a rule governing train and boat air pollution in May, the agency took away the normal adjustment for one year's inflation. Between the two changes, the value of a life fell 11 percent, based on today's dollar.
The AP discovered the change after a review of cost-benefits analyses over more than a dozen years. Although it may seem like a harmless bureaucratic recalculation, the devaluation has real consequences. When drawing up regualtions, government agencies put a value on human life and then weigh the costs against the lifesaving benefits of a proposed rule. The less a life is worth to the government, the less the need for a regulation, such as tighter restrictions on pollution. The EPA figure is not based on people's earning capacity, or their potential contributions to society, or how much they are loved and needed by their friends and family -- some of the factors used in insurance claims and wrongful-death lawsuits. Instead, economists calculate the value based on what people are willing to pay to avoid certain risks, and on how much extra employers pay their workers to take on additional risks. Most of the data is drawn from payroll statistics, some comes from opinion surveys.
The EPA made the changes in two steps: First, in 2004, the agency cut the estimated value of a life by 8 percent. Then, in a rule governing train and boat air pollution in May, the agency took away the normal adjustment for one year's inflation. Between the two changes, the value of a life fell 11 percent, based on today's dollar.