>>14418394>For the purposes of cost-benefit analysis, however, this answer leads tononsensical results. If we truly placed an infinite value on human life, we
should be placing traffic lights on every street corner. Similarly, we should all be
driving large cars with all the latest safety features, instead of smaller ones with
fewer safety features. Yet traffic lights are not at every corner, and people some-
times choose to buy small cars without side-impact air bags or antilock brakes.
In both our public and private decisions, we are at times willing to risk our lives
to save some money.
Once we have accepted the idea that a person’s life does have an implicit
dollar value, how can we determine what that value is? One approach, some-
times used by courts to award damages in wrongful-death suits, is to look at the
total amount of money a person would have earned if he or she had lived.
Economists are often critical of this approach. It has the bizarre implication that
the life of a retired or disabled person has no value.
A better way to value human life is to look at the risks that people are vol-
untarily willing to take and how much they must be paid for taking them. Mor-
tality risk varies across jobs, for example. Construction workers in high-rise
buildings face greater risk of death on the job than office workers do. By com-
paring wages in risky and less risky occupations, controlling for education, ex-
perience, and other determinants of wages, economists can get some sense
about what value people put on their own lives. >Studies using this approach conclude that the value of a human life is about $10 million.
