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Pricing Lives: Guideposts for a Safer Society
How society’s undervaluing of life puts all of us at risk―and the groundbreaking economic measure that can fix it
Like it or not, sometimes we need to put a monetary value on people's lives. In the past, government agencies used the financial "cost of death" to monetize the mortality risks of regulatory policies, but this method vastly undervalued life. Pricing Lives tells the story of how the government came to adopt an altogether different approach--the value of a statistical life, or VSL―and persuasively shows how its more widespread use could create a safer and more equitable society for everyone.
In the 1980s, W. Kip Viscusi used the method to demonstrate that the benefits of requiring businesses to label hazardous chemicals immensely outweighed the costs. VSL is the risk-reward trade-off that people make about their health when considering risky job choices. With it, Viscusi calculated how much more money workers would demand to take on hazardous jobs, boosting calculated benefits by an order of magnitude. His current estimate of the value of a statistical life is $10 million. In this book, Viscusi provides a comprehensive look at all aspects of economic and policy efforts to price lives, including controversial topics such as whether older people's lives are worth less and richer people's lives are worth more. He explains why corporations need to abandon the misguided cost-of-death approach, how the courts can profit from increased application of VSL in assessing liability and setting damages, and how other countries consistently undervalue risks to life.
Pricing Lives proposes sensible economic guideposts to foster more protective policies and greater levels of safety in the United States and throughout the world.
Like it or not, sometimes we need to put a monetary value on people's lives. In the past, government agencies used the financial "cost of death" to monetize the mortality risks of regulatory policies, but this method vastly undervalued life. Pricing Lives tells the story of how the government came to adopt an altogether different approach--the value of a statistical life, or VSL―and persuasively shows how its more widespread use could create a safer and more equitable society for everyone.
In the 1980s, W. Kip Viscusi used the method to demonstrate that the benefits of requiring businesses to label hazardous chemicals immensely outweighed the costs. VSL is the risk-reward trade-off that people make about their health when considering risky job choices. With it, Viscusi calculated how much more money workers would demand to take on hazardous jobs, boosting calculated benefits by an order of magnitude. His current estimate of the value of a statistical life is $10 million. In this book, Viscusi provides a comprehensive look at all aspects of economic and policy efforts to price lives, including controversial topics such as whether older people's lives are worth less and richer people's lives are worth more. He explains why corporations need to abandon the misguided cost-of-death approach, how the courts can profit from increased application of VSL in assessing liability and setting damages, and how other countries consistently undervalue risks to life.
Pricing Lives proposes sensible economic guideposts to foster more protective policies and greater levels of safety in the United States and throughout the world.
- GenresEconomicsNonfiction
296 pages, Hardcover
Published May 15, 2018
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Displaying 1 - 3 of 3 reviews
December 6, 2024
A Book with the Intended Audience Being Those Not Very Familiar with the Concept of Value of Statistical Life
Any review of this book would have to start out by stating what audience this book best serves. That audience is one that is not familiar with the concept of VSL (Value of Statistical Life). Good examples would include undergraduates taking their first cost benefit or regulatory economic class or law students who have a need to familiarize themselves with the concept for purposes of regulatory or cost benefit analysis (as opposed to damages since the concept of VSL usually differs from the concept of tort law's "making whole" concept). For this audience the book provides a very good introduction to the concept itself, its uses, its strengths and weaknesses in cost-benefit and regulatory analyses and important issues affecting it across, say, age and income demographics. For this audience this book would rate a four (of five star).
With respect to those who are familiar with the concept of VSL or for practitioners in fields that make extensive use of it (i.e., cost benefit or regulatory analysis) the book is much less valuable. The reason is that the main thrust of the discussion and analysis of the book, relating to VSL, would be already well known to that audience. For example, there are few experienced users of VSL who may not have come across issues involving age and income demographics and their impacts on VSL. Hence, for that audience, this book has much less value.
However, the book does have many lid-bits of facts (and ancillary to the concept of the VSL) even many experienced practitioners in the field may not know and would find interesting. For example, in court cases where companies have used VSL in cost-benefit analysis, on an internal basis, to determine whether products should be pulled or not, they have fared (ironically) significantly worse than companies that have not used VSL (and do not perform cost benefit analysis). The reason for this is that, in court, plaintiff attorneys have the habit of twisting these in-house analyses against their creators in front of juries.
Another example of an interesting piece of information, very specific, is the time from accident to death in many fire related or trauma related transportation accidents. The mean time from accident to death in fire related deaths is nine days, for example. In transportation related trauma cases about three months. The author also presents data relating to the costs of court cases versus administrative procedures in terms of worker related injury compensation. In court cases, for example, 83% of what is retrieved, in damages, goes towards court related costs of one type or another (unfortunately the author does not provide more detailed breakouts regarding cases where an agreement is reached before a court trial and the costs associated with full press trials). In administrative procedures (i.e., most state worker's compensation cases) the ratio is flipped around, with costs coming to only 20% of what the worker eventually receives in terms of compensation/damages. The book is just filled with such bits of information that even those with significant experience in cost-benefit or regulatory analysis would find interesting .
Thus, the book would have some value even to an audience knowledgeable regarding VSL albeit, obviously, much less than to an audience not familiar with the concept and use of VSL. For that audience this book would have more of a three-star value.
Any review of this book would have to start out by stating what audience this book best serves. That audience is one that is not familiar with the concept of VSL (Value of Statistical Life). Good examples would include undergraduates taking their first cost benefit or regulatory economic class or law students who have a need to familiarize themselves with the concept for purposes of regulatory or cost benefit analysis (as opposed to damages since the concept of VSL usually differs from the concept of tort law's "making whole" concept). For this audience the book provides a very good introduction to the concept itself, its uses, its strengths and weaknesses in cost-benefit and regulatory analyses and important issues affecting it across, say, age and income demographics. For this audience this book would rate a four (of five star).
With respect to those who are familiar with the concept of VSL or for practitioners in fields that make extensive use of it (i.e., cost benefit or regulatory analysis) the book is much less valuable. The reason is that the main thrust of the discussion and analysis of the book, relating to VSL, would be already well known to that audience. For example, there are few experienced users of VSL who may not have come across issues involving age and income demographics and their impacts on VSL. Hence, for that audience, this book has much less value.
However, the book does have many lid-bits of facts (and ancillary to the concept of the VSL) even many experienced practitioners in the field may not know and would find interesting. For example, in court cases where companies have used VSL in cost-benefit analysis, on an internal basis, to determine whether products should be pulled or not, they have fared (ironically) significantly worse than companies that have not used VSL (and do not perform cost benefit analysis). The reason for this is that, in court, plaintiff attorneys have the habit of twisting these in-house analyses against their creators in front of juries.
Another example of an interesting piece of information, very specific, is the time from accident to death in many fire related or trauma related transportation accidents. The mean time from accident to death in fire related deaths is nine days, for example. In transportation related trauma cases about three months. The author also presents data relating to the costs of court cases versus administrative procedures in terms of worker related injury compensation. In court cases, for example, 83% of what is retrieved, in damages, goes towards court related costs of one type or another (unfortunately the author does not provide more detailed breakouts regarding cases where an agreement is reached before a court trial and the costs associated with full press trials). In administrative procedures (i.e., most state worker's compensation cases) the ratio is flipped around, with costs coming to only 20% of what the worker eventually receives in terms of compensation/damages. The book is just filled with such bits of information that even those with significant experience in cost-benefit or regulatory analysis would find interesting .
Thus, the book would have some value even to an audience knowledgeable regarding VSL albeit, obviously, much less than to an audience not familiar with the concept and use of VSL. For that audience this book would have more of a three-star value.
January 16, 2021
Absolutely essential book for anyone interested in cost-benefit analysis, regulatory efficiency, or applied economics. This book gives a 360-degree view of the Value of a Statistical Life and really covers everything you want to know about the topic. It is a tad dense at times, but has a lot to offer folks who are interested in understanding the Value of a Statistical Life from its foremost researcher.
June 8, 2020
The books was informative. If you are looking to explore the topic for your professional growth it would be great, 5 stars. For me however although enjoying the information the book was more like a textbook. The author if really trying to reach the masses could use more of a narrative approach to keep the reader engaged. The book is definitely not a quick read.
Displaying 1 - 3 of 3 reviews