Extending the Domain of the Value of a Statistical Life

Journal of Benefit-Cost Analysis, Forthcoming

Vanderbilt Law Research Paper No. 20-37

35 Pages Posted: 21 Jul 2020

See all articles by W. Kip Viscusi

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - College of Arts and Science - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Date Written: July 20, 2020

Abstract

The value of a statistical life (VSL) establishes the money-risk tradeoff that U.S. government agencies have used for four decades to monetize the mortality reduction benefits of proposed regulations. This article advocates the adoption of the VSL more generally both for policy evaluation purposes and for setting the magnitude of regulatory sanctions involving fatalities. Agencies currently employ the inconsistent practice of using the VSL to set the stringency of regulations, while at the same time reverting to very low monetary values of sanctions for violations that result in fatalities. Reform of penalty levels to reflect the VSL will require increasing the current statutory limits on regulatory penalties. Revamping the penalty structure also will incentivize private companies to incorporate the VSL in their corporate risk analyses. Government agencies, including those concerned with national defense, similarly could profit from greater expansion of the use of the VSL in policy decisions.

Keywords: value of a statistical life, benefit-cost analysis, mortality, risk, regulatory penalties

JEL Classification: H43, J17, K23, K32, Q5

Suggested Citation

Viscusi, W. Kip, Extending the Domain of the Value of a Statistical Life (July 20, 2020). Journal of Benefit-Cost Analysis, Forthcoming , Vanderbilt Law Research Paper No. 20-37, Available at SSRN: https://ssrn.com/abstract=3656487

W. Kip Viscusi (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/bio/?pid=w-kip-viscusi

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vanderbilt University - College of Arts and Science - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://as.vanderbilt.edu/economics/bio/wkip-viscusi/

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://business.vanderbilt.edu/bio/w-kip-viscusi/

Vanderbilt University - Strategy and Business Economics

Nashville, TN 37203
United States

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