WASHINGTON — It’s not just the American dollar that’s losing value. A government 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 Environmental Protection Agency reckoned in May — a drop of nearly $1 million from just five years ago.
The Associated Press discovered the change after a review of cost-benefit analyses over more than a dozen years.
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.
Consider, for example, a hypothetical regulation that costs $18 billion to enforce but will prevent 2,500 deaths. At $7.8 million per person (the old figure), the lifesaving benefits outweigh the costs. But at $6.9 million per person, the rule costs more than the lives it saves, so it may not be adopted.
Some environmentalists accuse the Bush administration of changing the value to avoid tougher rules — a charge the EPA denies.
Dan Esty, a senior EPA policy official in the administration of the first President Bush and now director of the Yale Center for Environmental Law and Policy, said: “It’s hard to imagine that it has other than a political motivation.”
Agency officials say they were just following what the science told them.
Economists calculate the value based on what people are willing to pay to avoid certain risks, and on how much extra employers pay their workers to take on additional risks.
Most of the data is drawn from payroll statistics; some come from opinion surveys. According to the EPA, people shouldn’t think of the number as a price tag on a life.
The EPA traditionally has put the highest value on life of any government agency and still does, despite efforts by administrations to bring uniformity to that figure among all departments.
From 1996 to 2003, the EPA kept the value of a statistical life generally around $7.8 million to $7.96 million in current dollars, according to reports analyzed by The AP. In 2004, for a major air-pollution rule, the agency lowered the value to $7.15 million in current dollars.
Just how the EPA came up with that figure is complicated and involves two dueling analyses. The EPA took portions of each study and essentially split the difference.
“This sort of number-crunching is basically numerology,” said Granger Morgan, chairman of the EPA’s Science Advisory Board and an engineering and public-policy professor at Carnegie Mellon University. “This is not a scientific issue.”
