Hi folks.
The EPA values a statistical life at $11.4 million today. In 1980, that figure was $3.3 million (inflation-adjusted). In 1940? Maybe $500k. I'm interested in investigating the rising premium of life: people are willing to pay much more per life-year than they used to, in both monetary and non-monetary terms.
This essay traces the trend, looks at multiple lines of evidence beyond just VSL (healthcare spending across OECD countries, COVID lockdown revealed preferences, declining youth risk-taking), and explores plausible causal mechanisms: wealth effects, safety-risk feedback loops, and (less importantly) secularization, and smaller families.
Overall I think it's unclear whether the change is good or bad (I think leaning good), but I think understanding the changes and relevant tradeoffs is helpful in understanding modern people and making sure we set policies that are appropriate for current cultural and individual preferences (rather than, e.g., blindly follow historical patterns).
PS. Thanks for your feedback and positive reception on my previous post on Middlemen!
Posted by OpenAsteroidImapct
2 Comments
How much of the “rising premium of life” tied to the fact that we reduced a lot of low-hanging fruit in terms of early mortality? Like after adding three-point seat belts, airbags, and crumple zones, anything beyond that takes way more effort and computerized technology, so you have to adjust the cost needed to justify it.
Like, if you grew up just before the First World War, you were inundated with death, disease, and economic malaise until the 1950s, if you were lucky. You couldn’t value life highly because anyone doing so would go broke. Because early death has become less common from preventable causes, life is valued more.
EPA is proposing to change the terminology
> replacing the often misunderstood term “value of statistical life” with the more accurate term “value of mortality risk reduction;”
Also accounting for potential differences in people’s willingness to pay for cancer mortality risk reductions relative to mortality risks from workplace or other accidental deaths when estimating the benefits of actions that are expected to reduce cancer-causing pollutants
* EPA believes there is now sufficient scientific evidence for including a cancer differential in economic analysis of policies that reduce exposure to cancer-causing pollutants.
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As to why people are willing to pay more its the changing culture
We pay more to live in the Suburbs that have a premium for life, to drive fancier cars that come with expensive safety features that have a premium for life
That changing culture is here
* r/interestingasfuck/comments/v870vf/map_comparing_four_generations_of_kids_how_far/
* Great-Grandfather ( 1950s) Could walk Up to 1 mile to a local woods to play alone.
* Grandfather (1979) Could walk About half a mile alone to a swimming pool.
* Father (Late 1980s/Early 1990s) Could walk about a quarter mile, around the block to Play unsupervised
* Son (2007) Walks 300 yards to the end of the street, but only if visible to parents.
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Also would love to see info about the survey size
1,000 people are asked and 500 of them are under 40 give/gave a much different answer in 2001 then 1,000 people are asked and 600 of them are over 50 in 2024