The $6.9 Million Man | Woman

July 10, 2008 10:48 PM

"It's not just the American dollar that's losing value. The Environmental Protection Agency has decided that an American life isn't worth what it used to be. The value of a statistical life is $6.9 million in today's dollars, the [EPA] reckoned in May -- a drop of nearly $1 million from just five years ago."

"Though it may seem like a harmless bureaucratic recalculation, the devaluation has real consequences. When drawing up regulations, government agencies put a value on human life and then weigh the costs versus the lifesaving benefits of a proposed rule. The less a life is worth to the government, the less the need for a regulation, such as tighter restrictions on pollution."

Related: "The Value of Life: Estimates with Risks by Occupation and Industry" [PDF]

posted by ericb (31 comments total)

The EPA made the changes in two steps. First, in 2004, the agency cut the estimated value of a life by 8 percent. Then, in a rule governing train and boat air pollution this May, the agency took away the normal adjustment for one year's inflation. Between the two changes, the value of a life fell 11 percent, based on today's dollar.

So, let me get this straight.

Four years ago the Bush EPA threw out some cost-benefit number that was 8 percent below a 12-year statistical average that the AP extrapolated, and in May tossed out another number 3 percent below that. And "From 1996 to 2003" (i.e. over seven years and two Administrations), the value hovered at "generally around $7.8 million to $7.96 million in current dollars, according to reports analyzed by The AP." And they source the executive director of a group "which represents state and local air pollution regulators" to bolster the argument.

Man, that's pretty thin gruel. Particularly so when measured in the grand pantheon of Fucked Up Things The Bush EPA Has Done, which is a pretty considerable list.
posted by spiderwire at 11:13 PM on July 10, 2008

"Though it may seem like a harmless bureaucratic recalculation,"

Seems more meaningless than harmless. It does complement the fact that after 8 years of Republican rule, 6 of which were total and absolute, the Republican mantra "Are you better off today?" can only be answered in the negative by pretty much everyone underneath the top 1% of income earners.

Bush only gets a Yale C for his efforts to ruin the environment. He could have done so much more if only that Iraq thing hadn't gotten in his way.
posted by three blind mice at 11:48 PM on July 10, 2008

The EPA made the changes in two steps. First, in 2004, the agency cut the estimated value of a life by 8 percent. Then, in a rule governing train and boat air pollution this May, the agency took away the normal adjustment for one year's inflation. Between the two changes, the value of a life fell 11 percent, based on today's dollar.

Wow... what a crass way to discuss people's lives.

I'm getting a strong mental image of the head of the department that crunches these numbers as some bizarre amalgam of county CPA and Supreme Arbiter of the Soul. He sits undisturbed in his open floor-plan Lair of the Damned, swathed in a cloak of Deepest Crimson that can't help but look a little wan under the regulation fluorescent lighting. In his left hand he sips distilled infant tears from his "#1 Boss" novelty cup, while his right hand dances lightly across his TI-666 Graphing Calculator of Fate, reckoning the value of a single human life on an extra-wide liquid crystal display. He inputs the figures into his desktop (running Windows ME, of course), and prints the results out on his HP, noting the faded quality of the text and making a mental note to purchase a new cartridge of virginal blood first thing tomorrow.
posted by Rhaomi at 11:57 PM on July 10, 2008 [10 favorites has favorites]

Actually I just base the number on how many popped collars I see on the way to work.
posted by kid ichorous at 12:24 AM on July 11, 2008 [3 favorites has favorites]

I think this WaPo article does a better job of showing some of the motivations behind this move; at any rate the "value of human life" angle still seems pretty disingenuous to me.

Preemptive apologies for the lengthy quote, but there's a lot here:

The Supreme Court, in a decision 15 months ago [Massachusetts v. EPA] that startled the government, ordered the EPA to decide whether human health and welfare are being harmed by greenhouse gas pollution from cars, power plants and other sources, or to provide a good explanation for not doing so. [ . . . ]

The decision to solicit further comment overrides the EPA's written recommendation from December. Officials said a few senior White House officials were unwilling to allow the EPA to state officially that global warming harms human welfare. Doing so would legally trigger sweeping regulatory requirements under the 45-year-old Clean Air Act, one of the pillars of U.S. environmental protection, and would cost utilities, automakers and others billions of dollars while also bringing economic benefits, EPA's analyses found.

Several EPA officials, speaking on the condition of anonymity, said that throughout the process, White House officials instructed the agency to change their calculations with the aim of reducing the "social cost of carbon," a regulatory term that reflects the economic burdens stemming from greenhouse gas emissions.

It seems to me that the decision referenced in the HuffPo article in the FPP is the EPA's May 30th draft, though I'd welcome clarification on that point. At any rate, I don't think "devaluing life" is the driving political force here, or at least misses the dynamic; that doesn't make much sense as a motivating factor.
posted by spiderwire at 12:35 AM on July 11, 2008 [2 favorites has favorites]

The Republicans can get away with quantitatively devaluing human life, but the Dems can't even block telecom amnesty? Christ.
posted by ryanrs at 12:47 AM on July 11, 2008 [2 favorites has favorites]

I'm getting a strong mental image of the head of the department that crunches these numbers as some bizarre amalgam of county CPA and Supreme Arbiter of the Soul. He sits undisturbed in his open floor-plan Lair of the Damned, swathed in a cloak of Deepest Crimson that can't help but look a little wan under the regulation fluorescent lighting. In his left hand he sips distilled infant tears from his "#1 Boss" novelty cup, while his right hand dances lightly across his TI-666 Graphing Calculator of Fate, reckoning the value of a single human life on an extra-wide liquid crystal display. He inputs the figures into his desktop (running Windows ME, of course), and prints the results out on his HP, noting the faded quality of the text and making a mental note to purchase a new cartridge of virginal blood first thing tomorrow.

What really happens....

*Bush appointee sits staring out window. Thinks pure thoughts. Reads some Bible passages. Awaits call from Chevron telling him what number to use.*
posted by three blind mice at 2:12 AM on July 11, 2008 [1 favorite has favorites]

Can I cash out?
posted by Senator at 2:33 AM on July 11, 2008

Wow... what a crass way to discuss people's lives.

It sounds like your objection is not to the numbers but to the fact that there are numbers. If so, I ask: What is the alternative? We only have finite money to split between public health & safety, education, law enforcement, infrastructure, and whatnot.

For comparison, $6.9 million is roughly the cost of 750 child-years of public education.
posted by aubilenon at 2:49 AM on July 11, 2008 [1 favorite has favorites]

From the very sparse detail in the article it sounds like the second methodology should be omitted completely. The spending-to-avoid risk metric is pretty well established and the fact that another method is so wildly lower implies that it's measuring something confounding like class differences in risk appreciation or something.

Anyway I'm not near enough of a wonk to speak authoritatively on this but I wanted the thread to have some content that isn't "you can't value a life" or "Bush hates everything."
posted by Skorgu at 3:36 AM on July 11, 2008

this is just like the securities industry, after every bubble there is a devaluation, and these are just paper values anyway. i want to see this marked-to-market...
posted by geos at 3:59 AM on July 11, 2008

Hey guys, you ever thought why we need parliaments, democracy and shit like that, when we have these numbers that tell us what we want?
posted by Frankie Villon at 4:19 AM on July 11, 2008

This sounds about right. If someone offered to flip a coin and give me $3.45 million if it came up heads and kill me if it came up tails, I guess I'd take them up on that.
posted by Mr. President Dr. Steve Elvis America at 5:53 AM on July 11, 2008 [1 favorite has favorites]

Sounds like shit odds to me, Mr. America. I might consider a more reasonable split, like a 19/20 chance to take $345,000. Rolling that natural 1 would suck (critical failure indeed!) but better to have a 95% chance of a large chunk of cash, than a 50% chance of death, and a 50% chance of more money than anyone really needs.
posted by explosion at 6:24 AM on July 11, 2008

Damn, I knew I should have gotten out of the Human Life Value Index Fund, but I can't get out now or I'd lose an arm and a leg.
posted by jamstigator at 6:35 AM on July 11, 2008 [3 favorites has favorites]

This sounds about right. If someone offered to flip a coin and give me $3.45 million if it came up heads and kill me if it came up tails, I guess I'd take them up on that.

In that case, your life would be worth a quarter of thier number, a mere $1.7 million
posted by milestogo at 6:54 AM on July 11, 2008 [1 favorite has favorites]

Of course each life is worth less, there's a lot more people now than there were five years ago.
posted by inigo2 at 6:58 AM on July 11, 2008

So, I guess today would be a good time to short Soylent Green futures?
posted by Kadin2048 at 7:17 AM on July 11, 2008

In that case, your life would be worth a quarter of thier number, a mere $1.7 million

You'll probably find the link on here somewhere, but calculations using the choices people make when they spend money to reduce risk, and a broad range of similar behaviors, point to an implied valuation of our own lives at a consistent $2 million.
posted by StickyCarpet at 7:33 AM on July 11, 2008 [1 favorite has favorites]

In the Green.
posted by dragonsi55 at 7:54 AM on July 11, 2008

Well, when I say to myself "I feel like a million bucks," I am now technically depressed.
posted by kozad at 8:34 AM on July 11, 2008 [1 favorite has favorites]

The value of a statistical life is $6.9 million in today's dollars

See, that family I've got locked in my basement isn't a felony, it's an investment.
posted by quin at 10:15 AM on July 11, 2008 [2 favorites has favorites]

This sounds about right. If someone offered to flip a coin and give me $3.45 million if it came up heads and kill me if it came up tails, I guess I'd take them up on that.

Well, I'd definitely offer you $10K right now. I'm sure we could get donations from a lot of other Mefi people too.
posted by lupus_yonderboy at 12:22 PM on July 11, 2008

Lol. I wonder what figure the Department of Homeland Security uses, I mean given the prevalence of actual terrorists to actual spending it must be over a billion dollars.
posted by delmoi at 12:28 PM on July 11, 2008

In that case, your life would be worth a quarter of thier number, a mere $1.7 million

No, Steve was correct. The coin flip means they're taking a statistical 'half' of his life. If they performed this wager with 20 people, they'd kill about 10 and pay the full $65 million, assuming they pay the families of the people who die as well (which is the only way the comparison makes sense)
posted by delmoi at 12:34 PM on July 11, 2008

Of course American lives are worth less now than they were in 2004—we've been getting Iraqi lives wholesale.
posted by klangklangston at 2:27 PM on July 11, 2008 [1 favorite has favorites]

So... new arbitrary number lower than old arbitrary number.

Yesterday I would have been 68.124 pissed off about this. Today, barely managing 63.
posted by Durn Bronzefist at 3:17 PM on July 11, 2008

Sorry, what's that in Indians?
posted by pompomtom at 11:39 PM on July 13, 2008

No, Steve was correct. The coin flip means they're taking a statistical 'half' of his life. If they performed this wager with 20 people, they'd kill about 10 and pay the full $65 million, assuming they pay the families of the people who die as well (which is the only way the comparison makes sense)

I really don't know what your scenario means/shows, but to clear things up: Steve was not correct, and neither was I.

This sounds about right. If someone offered to flip a coin and give me $3.45 million if it came up heads and kill me if it came up tails, I guess I'd take them up on that.

If Steve would "take them up on that," then, to him, the expected value of the wager is greater than zero (or at least nonnegative). The expected value of the wager is 1/2*($3.45 Million) - 1/2*($value of Steve's life). So we have:

1/2*($3.45 Million) - 1/2*($value of Steve's life) >= 0

from where it follows

$3.45 Million >= $value of Steve's life
posted by milestogo at 7:54 AM on July 14, 2008

The statistical payout is (probability of death)*(value of life), or $3.45M in this hypothetical going to every family. That part is correct.

Howeer, putting aside intangibles (i.e., risk-averseness and any secondary effects as to a family member getting killed), the basic problem seems to me to be that most families can't absorb $3.45M in one-time risk. That's the fundamental reason that you have life insurance policies -- to amortize that cost.

And really, for any family that could absorb that much risk, the earnings potential of the family member lost would probably exceed the statistical average, so $3.45M wouldn't be enough.
posted by spiderwire at 9:05 AM on July 14, 2008

Who's killing Steve?
posted by Burhanistan at 9:12 AM on July 14, 2008