Valuing Life_ A Plea for Disaggregation

2004] VALUING LIFE 417
Tracking WTP is the goal that underlies current practice; and apart
from questions of administrability, it calls for a maximum level of
individuation.
1. A Thought Experiment. As a thought experiment, suppose
that an all-knowing regulator could costlessly determine each
person’s WTP for each statistical risk that he faces—and perfectly
match the level of regulatory protection to that WTP. In these
circumstances, the regulator should give all people no more and no
less than their WTP for each risk that they face. (In cases in which
people’s WTP was low because of poverty, they might be subsidized;
but they would not be forced to purchase goods for an amount in
excess of their WTP. I will return to this point, 130 but subsidies are not
my topic here.) Under this approach, regulatory benefits would be
treated the same as every other commodity that is traded on markets,
including safety itself. Of course most people face extremely serious
problems in dealing with risk, stemming both from an absence of
information and from bounded rationality. 131
The all-knowing
regulator would overcome these problems and provide people with
what they would want if they did not suffer from them.
If agencies could do this, then the current theory would be
perfectly implemented. It would follow that with full individuation,
overall WTP would be lower for poor people than for wealthy people,
for African Americans than for whites, and (possibly) for men than
for women. But, under this thought experiment, government would
not discriminate against groups; for example, it would neither decide
on high VSLs for programs predominantly benefiting whites nor
decide on low VSLs for programs predominantly benefiting African
Americans. The difference would be a product of aggregation of fully
individual VSLs—aggregation of the kind that most conventional
markets, including those for automobiles and consumer goods, now
provide. Recall that the use of WTP is justified because of its
connection with welfare and individual autonomy. If so, then fully
individual VSLs are justified on those same grounds.
130. See infra text accompanying notes 148–49.
131. See David A. Strauss, Why Was Lochner Wrong?, 70 U. CHI. L. REV. 373, 384 (2003).
See generally Christine Jolls et al., A Behavioral Approach to Law and Economics, 50 STAN L
REV. 1471, 1518–20 (1998) (arguing that despite adequate information consumers sometimes do
not make well-informed choices because of their inability to process the information).