Misuses and Proper Uses of Hedonic Values of Life
27 Pages Posted: 1 Sep 2000
Date Written: August 2000
Estimates of the statistical value of life have become the standard reference point for valuing risks to life and health in regulatory contexts. Attempts to use these estimates in courtroom settings as a measure of compensation are misdirected. The value-of-life estimates are based on a deterrence or prevention concept rather than an insurance concept and will provide overinsurance to accident victims. Value-of-life estimates are, however, pertinent for use as reference points in assessing liability. Possible examples of where it can be used include cases such as the Ford Pinto and GMC truck burn cases.
JEL Classification: D80, J17
Suggested Citation: Suggested Citation