Even the Bush administration sets the value of a human life higher than $250k
$250,000 is the figure many corporate executives suggest as a cap on noneconomic damages. I'm morally opposed to any artificial cap on damages, because I don't think we should put a price tag on human life. That said, if I had to put a value on human life, it would be much closer to $6.9 million dollars than to $250,000.
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.
The Associated Press discovered the change after a review of cost-benefit analyses over more than a dozen years.
Though it may seem like a harmless bureaucratic recalculation, the devaluation has real consequences.
When drawing up regulations, government agencies put a value on human life and then weigh the costs versus 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.
Consider, for example, a hypothetical regulation that costs $18 billion to enforce but will prevent 2,500 deaths. At $7.8 million per person (the old figure), the lifesaving benefits outweigh the costs. But at $6.9 million per person, the rule costs more than the lives it saves, so it may not be adopted.
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. According to the EPA, people shouldn’t think of the number as a price tag on a life.
If we were going to set a damage cap, why not base it on these sorts of government figures as opposed to an insultingly low $250k or $500k cap?