the price of life

No comment on the thesis of “The economic logic of executing computer hackers” (Slate; cited by ACB), but this caught my eye:

When we say that a human life is worth $10 million, we mean nothing more or less than this: A typical person, faced with a 1-in-10-million chance of death, seems to be willing to pay about a dollar to eliminate that risk. We know this not from theory but from observation – by looking, for example, at the size of the pay cuts people are willing to take to move into safer jobs. On this basis, Harvard professor Kip Viscusi estimates the value of a life at $4.5 million overall, $7 million for a blue-collar male and $8.5 million for a blue collar female. (Viscusi acknowledges that it’s puzzling for a blue-collar life to be worth more than a white-collar life, but that’s what the data show.)

Perhaps white-collar workers, unfamiliar with the concept of death on the job, underestimate its likelihood.

This entry was posted in economics. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *