Document Type
Article
Publication Title
Regulation and Governance
Publication Date
9-2009
ISSN
1748-5983
Page Number
306
Keywords
devaluation of life, statistical life, economics research, benefit-cost analysis
Disciplines
Law | Law and Economics
Abstract
The historical context of benefit–cost analysis provides a useful starting point for understanding why I advocate the policy application of the VSL measure despite the controversy surrounding these figures. Both Carruthers and Fourcade discuss the historical development of benefit–cost analysis, which was introduced as a policy evaluation tool within the context of public works projects. The Army Corps of Engineers and the US Department of the Interior’s Bureau of Reclamation have long assessed the economic benefits and costs of dams and related water resource projects and have used these estimates to justify the efforts, which are required by legislation to meet the test that a project’s benefits exceed the costs. Critiquing these economic assessments was my first published encounter with the cost–benefit methodology. In Berkman and Viscusi (1973),we concluded that many of the purported economic benefits calculated by the Bureau of Reclamation were overstated. But more importantly, we found that while the adverse ecological consequences of the dams were discussed in the policy assessments, those effects were subsequently easily ignored because no monetary value was attached to them. One lesson I derived from this experience is that monetizing difficult-to-quantify out-comes does not devalue them but rather makes it possible for such effects to be treated as just as real and consequential as more conventional economic effects.
Recommended Citation
W. Kip Viscusi,
Reply to Comments on "The Devaluation of Life", 3 Regulation and Governance. 306
(2009)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/1573