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Health Inflation, Wealth Inflation, and the Discounting of Human Life

45 Pages Posted: 19 May 2011 Last revised: 20 May 2011

Ben Trachtenberg

University of Missouri School of Law

Date Written: May 18, 2011

Abstract

This Article presents two new arguments against “discounting” future human lives during cost-benefit analysis, arguing that even absent ethical objections to the disparate treatment of present and future humanity, the economic calculations of cost-benefit analysis itself - if properly calculated - counsel against discounting lives at anything close to current rates. In other words, even if society sets aside all concerns with the discounting of future generations in principle, current discounting of future human lives cannot be justified even on the discounters’ own terms. First, because cost-benefit analysis has thus far ignored evidence of rising health care expenditures, it underestimates the “willingness to pay” for health and safety that future citizens will likely exhibit, thereby undervaluing their lives. Second, cost-benefit analysis ignores the trend of improved material conditions in developed countries. As time advances, residents of rich countries tend to live better and spend more, meaning that a strict economic monetization of future persons values the lives of our expected descendents above those of present citizens. These two factors justify “inflation” of future lives that would offset, perhaps completely, the discount rate used for human life. Until regulators correct their method of discounting the benefits of saving human lives in the future, the United States will continue to suffer the fatal costs of underregulation, and agencies will remain in violation of legal requirements to maximize net benefits.

Keywords: discounting, health inflation, wealth inflation, human life, future persons, underregulation, cost-benefit analysis, CBA, climate change, regulation

Suggested Citation

Trachtenberg, Ben, Health Inflation, Wealth Inflation, and the Discounting of Human Life (May 18, 2011). Oregon Law Review, Vol. 89, p. 1313, 2011; University of Missouri School of Law Legal Studies Research Paper No. 2011-12. Available at SSRN: https://ssrn.com/abstract=1845504

Ben Trachtenberg (Contact Author)

University of Missouri School of Law ( email )

Missouri Avenue & Conley Avenue
Columbia, MO 65211
United States

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