Jul 15, 2008

Humor: (Statistical) Human life costs

Colbert mentions that five years ago, the value of a human life (according to the EPA) was 7.8 million $, which was lowered to 6.9 million in today's dollars. A cursory check with the US Dollar Index (DX) showed that it decreased from ~100 to ~78 within the same period. Therefore, actually, the money should have been 7.8 * .78 = 6.08 million $.

This leads to some interesting questions:

Does dollar depreciation mean that employees are taking lesser risks to carry out their job functions? Why should the perceived value of a human life decrease with time? The world is currently enjoying record levels of overall prosperity, at any point in its history. The notion that a statistical human life is worth lesser now, compared to 2003/4 needs some explanation. This is also mentioned in a recent MSNBC article.

My views:
The evaluation of human life is used mainly by cost-benefit analyses, for implementing environmental regulations. Although these analyses are intended to provide guidelines to drive policy, IMO they should not be the only tools used to make public environmental policy.


Dr. JRSB said...

It's the circle of life (minus the life). Once again, the Colbert Report points out that the emperor has no clothes. A thought provoking post, and something that would be worth discussing with the Industrial Health and Safety experts that you know.

I wonder if this is a good indicator of our environmental policies, or an indicator of the influence that industrial lobbyists have on valuation policies?

Pradeep said...

It might be both..
I can't find the link now, but the folks at the Environmental Economics blog (env-econ.net) had some good points about these valuation policies.

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