Dollar Value of American life drops – Now What?

EPA: Value of American life drops to $6.9 Million

— It’s not just 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 “value of a statistical life” is $6.9 million in today’s dollars,the Environmental Protection Agency reckoned in May — a drop of nearly $1 million from just five years ago.

American lives worth $1 million less than 2003

The value of an American life has fallen by nearly $1 million in five years, according to a US government agency.

While the “value of a statistical life” was considered to be between $7.8 million and $7.96 million from 1996 to 2003, today it is just $6.9 million, the Environmental Protection Agency says. The estimate is important because it is used by government agencies when drawing up regulations: they compare the cost of a proposed rule with its life-saving benefits according to the official value placed on a human life. Therefore the less a life is considered to be worth, the smaller the justification for costly legislation that could, for example, protect people from pollution because the measure would be seen as too expensive given the value of the lives saved. The EPA says the change is based on improved economic studies and consumer preferences. Rather than a human price tag, the “value of a statistical life” is based on what someone is prepared to pay to avoid certain risks as well as how much workers who take on additional risks are compensated by their employers, the agency says. The change was made in two stages. In 2004, the agency reduced the estimated value of a life to $7.15 million dollars. Then in May,  following a rule governing train and boat air pollution, the agency removed the normal adjustment for one year’s inflation. The two changes added up to an 11 percent reduction in the value, based on today’s dollar.Similar calculations by the Bush administration have proved highly controversial. In 2002, the EPA decided the value of elderly people was 38 percent less than that of people under 70. The agency reversed its position after the move became public.

Value of a Statistical Life (VSL)

Executive Order 12866 requires agencies to examine the costs and benefits of both proposed and final regulatory actions. DOT administrations promulgate rules to enhance safety and protect the environment, for which the monetary value of preventing injuries and loss of life must be estimated among the benefits. Administrations also undertake investments and administrative actions that must be evaluated in terms of their safety benefits.

Value of life: … with a limited supply of resources or infrastructural capital (e.g. ambulances), or skill at hand, it is impossible to save every life, so some trade-off must be made. Also, this argumentation neglects the statistical context of the term. It is not commonly attached to lives of individuals or used to compare the value of one person’s life relative to another person’s. It is mainly used in circumstances of saving lives as opposed to taking or “producing” lives.

In risk management activities such as in the areas of workplace safety, and insurance, it is often useful to put a precise economic value on a given life.

Like Britain, America has to put valuation on human life … insurance agencies and lawyers have done this for years.The human value is determined by the earning potential an individual has, computed by their age.  No emotions can be included in the equation.  Insert your face into this dollar and re-adjust your ego.