Valuing Life_ A Plea for Disaggregation

2004] VALUING LIFE 441
an international agency should devote its resources to the latter
rather than the former. To illustrate this point, imagine choosing
between two programs:
(A) Program A would eliminate (at a stated cost of $500) a
1/10,000 risk faced by fifty poor people in Costa Rica, each
willing to pay $2 to eliminate that risk.
(B) Program B would eliminate (also at a stated cost of $500) a
1/10,000 risk faced by fifty wealthy people in Germany,
each willing to pay $350 to eliminate that same risk.
In principle, there is no reason to think that a donor should
prefer to save the Germans, even though their WTP is far higher than
that of the Costa Ricans. In fact, Program A has much higher priority,
because it would help people who were facing extreme deprivation.
What is true at the individual level is true across nations as well.
But now consider a different issue. The government in a poor
nation is deciding on appropriate policy to reduce workplace risks;
what VSL should it use? At least under the assumptions that I have
given thus far, such a government would do well to begin by using the
admittedly low WTP of its own citizens. If citizens in that nation show
a WTP of $2 to eliminate risks of 1/10,000, then their government
does them no favors by requiring them to pay $50 or $10 for that
protection. This is the sense in which VSL properly varies across
nations, and in which citizens of poor nations have lower VSLs than
citizens of wealthy ones.
The point has strong implications for international labor
standards. It is tempting to suggest that workers in poor countries, for
example China and India, should receive the same protection as those
in the United States; why should a worker in Beijing be subject to
significantly higher death risks than a worker in Los Angeles? So long
as the distribution of global income has the form that it does, a system
that gives Chinese workers the same protection as American workers
is not in the interest of Chinese workers—assuming, as I am, that the
cost of that protection is borne by workers themselves. Requiring
Chinese workers to have the same protection as Americans amounts
to a forced exchange on terms that Chinese workers reject.
In these circumstances it is unsurprising that workers in wealthy
nations, not in poor ones, often clamor the loudest for greater
protection of workers in poor nations; workers in wealthier nations
would be the principal beneficiaries of such regulation, which would
protect them against competition from those in poorer nations. The