Pricing Lives: Guideposts for a Safer Society

by W. Kip Viscusi

Overview

How society’s undervaluing of life puts all of us at risk—and the groundbreaking economic measure that can fix it

Like it or not, sometimes we need to put a monetary value on people's lives. In the past, government agencies used the financial "cost of death" to monetize the mortality risks of regulatory policies, but this method vastly undervalued life. Pricing Lives tells the story of how the government came to adopt an altogether different approach—the value of a statistical life, or VSL—and persuasively shows how its more widespread use could create a safer and more equitable society for everyone.

In the 1980s, W. Kip Viscusi used the method to demonstrate that the benefits of requiring businesses to label hazardous chemicals immensely outweighed the costs. VSL is the risk-reward trade-off that people make about their health when considering risky job choices. With it, Viscusi calculated how much more money workers would demand to take on hazardous jobs, boosting calculated benefits by an order of magnitude. His current estimate of the value of a statistical life is $10 million. In this book, Viscusi provides a comprehensive look at all aspects of economic and policy efforts to price lives, including controversial topics such as whether older people's lives are worth less and richer people's lives are worth more. He explains why corporations need to abandon the misguided cost-of-death approach, how the courts can profit from increased application of VSL in assessing liability and setting damages, and how other countries consistently undervalue risks to life.

Pricing Lives proposes sensible economic guideposts to foster more protective policies and greater levels of safety in the United States and throughout the world.

Product Details

ISBN-13:	9780691208596
Publisher:	Princeton University Press
Publication date:	10/06/2020
Pages:	296
Product dimensions:	6.12(w) x 9.25(h) x (d)

About the Author

W. Kip Viscusi is the University Distinguished Professor of Law, Economics, and Management at Vanderbilt University. His many books include Economics of Regulation and Antitrust and Fatal Tradeoffs: Public and Private Responsibilities for Risk.

Table of Contents

Preface ix

1 How Pricing Lives Saves Lives 1

2 How the Government Values Risks to Life 23

3 The Hazards of Corporate Valuations of Product Risks 45

4 Corporate Risk Analyses and Regulatory Sanctions: Lessons from the GM Ignition Switch Recall 70

5 The Devaluation of Life: Should Age Matter? 90

6 Should There Be Preferential Treatment of the Rich? 114

7 Promoting Risk Equity through Equitable Risk Tradeoffs 139

8 Fine-Tuning the Selection of the Pertinent VSL 160

9 How the Courts Value Lives 190

10 Setting Safety Guideposts for Private and Public Institutions 218

Notes 231

Index 261

What People are Saying About This

From the Publisher

"From probably the world's leading thinker on the valuation of mortality risks, Pricing Lives makes a fundamental, enduring contribution."—Cass Sunstein, Harvard Law School

"This book presents the argument that not only should there be a monetary value placed on lives, but that the actual value used by regulatory agencies and courts is generally too low. Viscusi has done a real service by making these ideas accessible to the general public."—Joseph P. Newhouse, Harvard Medical School

"Viscusi is the foremost expert on using benefit-cost analysis for safety decision making. In Pricing Lives, he provides a highly readable yet comprehensive overview of the value of a statistical life, a crucial component of such analysis. Importantly, he shows how it can be more fully exploited by corporations, courts, and government regulators as a basis for cost-effective safety decisions."—John W. Ruser, president and CEO of the Workers Compensation Research Institute

"Pricing Lives is an accessible, example-rich, and interestingly written account of the ways in which lives ought to be accorded monetary value for the purposes of policymaking. Kip Viscusi is the foremost authority on the subject."—Steve Shavell, Harvard Law School

"Written by an expert at the top of his field, this book explains how to perform better analysis of public and private decisions using the value of a statistical life, or VSL. Viscusi not only covers many substantive topics—from environmental to vehicle and occupational safety—but also provides invaluable guidance on how to deal with some of the thorny issues of VSL."—Frank Sloan, Duke University

Editorial Reviews

Winner of the Kulp-Wright Book Award, American Risk and Insurance Association

From the Publisher