Citation

Kenkel D. J. Consum. Policy 2003; 26(1): 1-21.

Affiliation

Department of Policy Analysis and Management, Cornell University, Ithaca, NY 14853, USA (dsk10@cornell.edu)

Copyright

(Copyright © 2003, Holtzbrinck Springer Nature Publishing Group)

DOI

10.1023/A:1022646013504

PMID

unavailable

Abstract

This paper is a critical review of current practice for the economic evaluation of the life-saving benefits of U.S. consumer policy regulations. Selected evaluations conducted by the U.S. Environmental Protection Agency, the Economic Research Service of the U.S. Department of Agriculture, and the U.S. Food and Drug Administration are briefly reviewed. The standard approach to placing a dollar value on the life-saving benefits of regulations is based on societal willingness to pay for mortality risk reductions, conveniently summarized as the value of a statistical life (VSL). The paper proposes a common-sense rule for improving current practice: Different agencies reducing similar health risks for similar populations should use consistent estimates of the VSL, but each agency should use VSL estimates that are specific to the health risk and population affected by its regulations. Developing VSL estimates that vary by cause of death and that reflect differences in willingness to pay due to age, income, and risk preferences poses a challenge for both the research community that generates VSL estimates and policymakers.