Valuing Life_ A Plea for Disaggregation

2004] VALUING LIFE 393
of both autonomy and welfare—and that those considerations also
show when the use of WTP to calculate VSL is misguided.
The second reason involves the possibility of moving a long way
toward greater individuation, even if full individuation is not feasible.
With respect to the reduction of cancer risks, for example, there is
reason to believe that people are willing to pay an extra amount;
hence VSL, based on WTP, is significantly higher than studies of risks
not involving cancer suggest. 23
For this reason, the government’s
current valuation of cancer risks is probably too low, resulting in
widespread underprotection of the public. Similarly, there is reason to
think that VSL should be higher for mortality risks from airplanes
than for statistically identical risks on the highways. 24 More generally,
different agencies, dealing with qualitatively different risks, might
well use different VSLs, simply because market evidence is likely to
show just those differences. 25
Full individuation is not feasible, but
greater individuation would be quite easy. The result would be
different judgments from agencies, simply because new VSLs—some
higher, others lower—would produce different conclusions about
when regulation is justified.
A far more troublesome problem, to which I will devote
considerable attention, involves disparities along demographic lines.
For now, notice a simple factual point: WTP is dependent on ability
to pay, and those with little income and wealth will show little WTP. 26
It follows that the VSL of poor people, when calculated based on
WTP, will be lower than the VSL of rich people, simply because poor
people are poorer. Suppose that the $6.1 million figure used by the
EPA represents the average WTP of a population-wide sample.
When risks are faced disproportionately by wealthy people, VSL,
23. See supra note 11 and accompanying text.
24. See Carlsson, supra note 12, at 148 (finding that individuals’ WTP to reduce the risk of
airline deaths is more than double their WTP to reduce the risk of taxi deaths).
25. As I explain in Part I.A, different agencies now use different numbers for VSL, but
these differences seem random and do not stem from a careful inquiry into the questions that I
am emphasizing here.
26. If the tax laws ensured the right level of redistribution, there would be little reason to
use regulatory policy to promote redistributive goals. Regulation would be based on WTP, and
tax laws would ensure such redistribution. Hence the analysis of VSL and WTP would be
different with an optimal tax policy from what it must be without such a policy. If tax policy
were optimal, a highly variable WTP would be appropriate and there would be no need to take
account of distributional concerns. The discussion below is based on the assumption that more
redistribution is desirable and that regulatory policy can sometimes help to promote that goal,
though less effectively than an optimal tax.