How many dollars is a human life worth to the US government?
August 16, 2013 3:38 PM   Subscribe

On NPR today, I heard an explanation of why there are less safety requirements for cargo planes than for passenger planes: Every time the government (USA) wants to implement a new safety measure, they are required to run a cost/benefits analysis. Since an accident on a passenger plane can kill a whole bunch of people, while one on a cargo plane is likely to only kill the pilot and the copilot, it's more difficult to get a safety measure past the required threshold on the cost/benefits for a cargo plane than for a passenger plane. This to me implies that they must have put a dollar value on each human life; otherwise they couldn't compare cost in dollars versus benefit in lives saved. What is that price?

I imagine that there may be other situations, unrelated to planes or transportation or whatever, in which a similar thing is done, and I imagine different prices might be used in different comparisons by different parts of the government. I'm not strictly interested specifically in this plane situation alone; I'm just using it as an example. I'm interested in any such dollar value placed on a life for the purposes of cost/benefit analyses by the government.
posted by Flunkie to Law & Government (7 answers total) 14 users marked this as a favorite
Best answer: It varies by agency.
posted by bac at 3:43 PM on August 16, 2013 [1 favorite]

Best answer: The FAA uses a value of a statistical life of $5.8 million [pdf].
posted by jedicus at 3:44 PM on August 16, 2013 [2 favorites]

It is a fundamental part of any cost-benefit analysis that involves loss-of-life scenarios, let alone safety-related investments such as road upgrades. It also extends to injury costs. The value varies, in my experience by jurisdiction rather than agency per se.
posted by GeeEmm at 3:57 PM on August 16, 2013

Best answer: Wrong government, but same basic idea: NICE (one of the bodies that determines best practices for the UK's NHS) deals in Quality Adjusted Life Years, a measure that takes into account both lifespan and quality of life. Roughly, half a year of healthy, happy life is 0.5 QALYs; half a year of life confined to bed or in constant pain might be 0.3 QALYs. NICE uses this to compare the improvements that various treatments confer to patients, working out the best way to allocate the NHS's budget to maximise QALYs (i.e. combined lifespan and quality of life) across the population.

...All of that is a buildup to saying that, when considering which treatments should be paid for by the NHS, NICE is willing to pay a maximum of £20,000 - £30,000 per QALY.

Life expectency in the UK is roughly 81 years, so from that we can reasonably say that the NHS prices a human life at something like £1.6 - £2.4 million.
posted by metaBugs at 4:25 PM on August 16, 2013 [2 favorites]

Interesting timing for your question. This may be a bit off the subject, but I work with ex-Air Force pilots and just yesterday, due to the recent UPS plane crash, I brought up a similar question. I asked, in a sort of joking, just throwing it out there kind of way: why don't they put ejection seats for pilots in those types of planes (yes, my question may be kind of stupid!). I mean, if the pilot knows that he's going down for like 30 seconds or longer, than why not provide an opportunity for him to escape? (Although it may only be like 30 seconds or LESS that they are actually realizing they are going to crash, etc. etc. - not an expert.) The answer was basically pilots in those situations are expected/expecting to go down with the ship; and that the cost to add some type of life-saving measure like that to planes is way more expensive than replacing two pilots. He was very matter of fact. Like I said, maybe my question was a bit too elementary, but answer was interesting.
posted by foxhat10 at 5:37 PM on August 16, 2013 [1 favorite]

I dimly remember back in my university days being told that from a civil engineering perspective one human life was worth $10 million. I'm not a civil engineer though and neither was that professor but it does fit with some of the above quoted figures.

The point wasn't really about the cost but about figuring out engineering tradeoffs. If you have a curved road on a cliff and you build a guardrail N feet tall, f(N) people die which costs society f(N) * $10e6. The cost of the guardrail is g(N). Now you can minimize g(N)+f(N).

If you want a real answer though I'd ask an insurance agent.
posted by chairface at 9:20 AM on August 17, 2013

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