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THE WAY WE LIVE NOW
The Human Factor
by Jim Holt; Jim Holt writes for The
New Yorker, Slate and other publications.
Article re-printed from The New York Times
March 28, 2004
How much is your life worth to you? On the face of
it, that's an idiotic question. No amount of money
could compensate you for the loss of your life, for
the simple reason that the money would be no good
to you if you were dead. And you might feel, for different
reasons, that the dollar value of the lives of your
spouse or children -- or even a stranger living on
the other side of the country -- is also infinite.
No one should be knowingly sacrificed for a sum of
money: that's what we mean when we say that human
life is priceless.
But the government set a price for it four years
ago: $6.1 million. That's the figure the Environmental
Protection Agency came up with when it was trying
to decide how far to go in removing arsenic from drinking
water. Arsenic can cause diseases, like bladder cancer,
that will
predictably kill a certain number of people. But reducing
the arsenic in water gets more and more expensive
as the poison levels approach zero. How many dollars
should be spent to save one "statistical life"?
The answer, reasoned the people at the E.P.A., depends
on how much that life is worth. And they're not the
only ones doing such calculations. The Department
of Transportation also puts a price tag on a human
life when deciding which road improvements are worth
making, although it's the rather more modest one of
$3 million.
Presumably, losing your life in a highway smashup
is less unpleasant than slowly dying of bladder cancer.
The advantage of this kind of cost-benefit analysis,
its proponents declare, is that it promises to make
our public policies more rational. But critics find
the idea of putting a dollar value on human life preposterous.
Part of their case is ethical: it is simply wrong,
they say, to count death as a "cost"; no
public action that involves lost lives should be evaluated
in monetary terms. But they also object to the ways
in which the price of life is calculated.
How, exactly, did the E.P.A. arrive at its figure
of $6.1 million?
Economists looked at the salaries paid to workers
in riskier jobs like mining. They figured out that
such workers received, on average, an additional $61
a year for facing an extra 1-in-100,000 risk of accidental
death. Evidently, these workers valued their own lives
at 100,000 times $61, or $6.1 million. (In 2002, the
E.P.A. revised the price of a life downward, to $3.7
million -- or if you're older than 70, $2.3 million.)
Ingeniously simple, no? But on closer inspection,
you begin to have misgivings about this methodology.
In the first place, it is not at all obvious that
workers really understand the risks they face in the
workplace. Women seem to be much less willing to accept
such risks than
men. Does that mean their lives should be priced higher?
Blacks and nonunionized workers demand little or no
risk premium for taking dangerous jobs. Does that
mean their lives should be priced lower? Poorer people,
for whom an extra dollar is highly valuable, will
take less compensation for facing danger. Thus, cost-benefit
analysis tells us it is more efficient to locate toxic
waste dumps near poorer neighborhoods.
Perhaps the strangest thing about the life-pricing
business is the way the lives of future generations
become discounted -- quite literally. Regulators begin
with the assumption that it's better to have $200
in your pocket today -- when you can earn interest
on it -- than a promise
of $200 in the future. Equating money with human life,
they conclude that a life saved today should count
twice as much, in dollar terms, as a life saved 10
years from now; a life saved a century from now scarcely
counts at all. That is why cost-benefit analysis might
sanction, say,
nuclear reactors that provide you and me with cheap
energy at the expense of lives lost to cancer decades
down the road. But as Frank Ackerman and Lisa Heinzerling
point out in their recent book, "Priceless: On
Knowing the Price of Everything and the Value of Nothing,"
it is hardly clear why the same logic should apply
to the value of our great-grandchildren. (On the other
hand, those future generations may well have developed
a cure for cancer, so perhaps we are justified in
worrying about them less.)
Champions of cost-benefit analysis -- from the controversial
Bush administration regulatory guru John D. Graham
to the more circumspect liberal law professor Cass
Sunstein -- maintain that the government is always
valuing human life implicitly anyway, so we might
as well be
forthright about it. Only then, they say, will we
be able stop spending excessively large sums to protect
against small risks and vice versa. Most of us, after
all, are deficient in rationality: we are excessively
fearful of unlikely hazards when those hazards are
shockingly unfamiliar or disturbingly involuntary
(like dying in a terrorist attack or from something
in the drinking water). And we are far too cavalier
about much more immediate risks like dying on the
highway (which we do at a rate of 117 fatalities per
day).
But are ordinary people really being irrational when
they seem to "price" their lives differently
at different times? Some people even put a negative
price on their lives -- when, for instance, they pay
money to engage in a risky activity like mountain
climbing. The economist E.J. Mishan, an early authority
on cost-benefit analysis, has argued that the value
of a human life has no meaning apart from the nature
of the risk that is being measured. To say that a
human life is "priceless" does not necessarily
mean that it is worth more than any amount of money.
It may
just mean that money is the wrong yardstick to use
when our decisions involve the loss of life. Even
the most ardent cost-benefit analyst would spend more
money to rescue a single actual child than to save
10 "statistical lives."
http://www.nytimes.com
GRAPHIC: Photo (Photograph by H. Armstrong Roberts)
Chart: "PAY TO BREATHE"
How much Americans will spend to avoid one day of
each symptom, as
estimated for the E.P.A. (in 1990 dollars).
Coughing: $4.98
Chest tightness: $6.29
Head congestion/sinus: $8.20
Shortness of breath: $10.57
Allergy (chronic): $15.72
Eye irritation: $15.72
Throat congestion: $16.35
Drowsiness: $18.87
Nausea: $22.01
Headache: $25.16
Asthma attack: $32.48
Bronchitis and emphysema (chronic): $84.28
LOAD-DATE: March 28, 2004
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