What is YOUR LIFE worth to the Dept of Transportation? About 2.7 Million.


This cost allocation study Notes that the EPA is willing to spend almost twice what the Dept of Transportation is willing to spend to keep YOU alive. The numbers seem old so there may be some adjustments, but interesting is this:

In policy and regulatory analyses, EPA uses a value of $4.8 million to represent the cost of a premature death. This value is the mean of estimates from 26 studies dating back to the mid 1970s that have attempted to place a value on the cost of premature deaths. Estimates from those studies range from $0.6 million to $13.5 million, reflecting the large uncertainties in trying to estimate the public's willingness to pay to avoid premature death.

The Department of Transportation has adopted a value of $2.7 million per premature death, based on a comprehensive 1991 study by the Urban Institute

People are reluctant to accept this type of "dollar valuation" analysis even though it's commonplace in legal settlements and is a VERY APPROPRIATE way to allocate public funds. Note that the 4.8 million dollars the EPA spends to save a life would save thousands of lives if spent in alternative ways. One can argue that the complexity of this type of analysis undermines the rationale behind using this "lives for dollars" game, but it's a weak argument. Yet even with this appropriate method of trying to allocate dollars to lives and then allocate them most effectively, we tend to apply funding in odd ways and squander billions due to political budgeting.