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Cosmic Markdown: EPA Says Life Is Worth Less
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"It is, sometimes, a weird idea" to weigh lives against other costs, acknowledged Jack Wells, chief economist for the U.S. Department of Transportation. "But, if you think about it, people behave that way all the time. . . . We could eliminate a lot of the [highway] fatalities by imposing a 10-mile-per-hour speed limit." But, he said, society implicitly tolerates greater highway deaths in return for the economic benefits of faster travel.
But how do you put a dollar value on a life, even in a generic sense?
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.
But it is one thing to calculate the numbers and another to explain them to the public. The EPA has been fighting that battle since last week, when the Associated Press revealed that the agency's air office had reduced its Value of a Statistical Life.
Al McGartland, the director of the agency's National Center for Environmental Economics, said the air office had revised the old figure in 2004 after new academic research showed it was skewed too high.
"It's based on better methods," McGartland said of the air office's assessment. He said the new number would increase over time, in part because of inflation.
The EPA's value for life remains one of the highest. Earlier this year, the Department of Transportation raised its value -- but even after the increase, it stood at $5.8 million, more than a million dollars less than the EPA's.
Still, environmental activists said the decision made it more likely that the EPA's regulations would allow greater air pollution, because deaths triggered by the pollution would seem to count for less. Experts say serious air pollution can make heart and lung conditions worse, sometimes resulting in death.
One of the researchers whom the EPA cited said he was puzzled at the agency's calculations on the value of a human life.
