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The Cost-per-Life-Saved Cutoff for Safety-Enhancing Regulations

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  • Lutter, Randall
  • Morrall, John F, III
  • Viscusi, W Kip

Abstract

This article develops a model of the conditions under which risk regulations that are too expensive have net adverse health effects. Two principal components of this relationship are the implicit value of life and the income elasticity of risky behaviors. Using new empirical estimates for the income elasticity of many of the most consequential risk-related behaviors, our results imply that a $15 million decrease in income is associated with the loss of an additional statistical life. Regulations that cost more than $15 million per expected life saved will have counterproductive effects on individual mortality. Copyright 1999 by Oxford University Press.

Suggested Citation

  • Lutter, Randall & Morrall, John F, III & Viscusi, W Kip, 1999. "The Cost-per-Life-Saved Cutoff for Safety-Enhancing Regulations," Economic Inquiry, Western Economic Association International, vol. 37(4), pages 599-608, October.
    • Handle: RePEc:oup:ecinqu:v:37:y:1999:i:4:p:599-608
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    Citations

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    Cited by:

    1. Diana W. Thomas, 2019. "Regressive effects of regulation," Public Choice, Springer, vol. 180(1), pages 1-10, July.
    2. Thomas J. Kniesner & W. Kip Viscusi, 2023. "Compensating Differentials for Occupational Health and Safety Risks: Implications of Recent Evidence," Research in Labor Economics, in: 50th Celebratory Volume, volume 50, pages 83-116, Emerald Group Publishing Limited.
    3. Mirumachi, Naho & Torriti, Jacopo, 2012. "The use of public participation and economic appraisal for public involvement in large-scale hydropower projects: Case study of the Nam Theun 2 Hydropower Project," Energy Policy, Elsevier, vol. 47(C), pages 125-132.
    4. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    5. Broughel, James & Viscusi, Kip, 2017. "Death by Regulation: How Regulations Can Increase Mortality Risk," Working Papers 06864, George Mason University, Mercatus Center.
    6. David Merrell & Kevin M. Simmons & Daniel Sutter, 2005. "The Determinants of Tornado Casualties and the Benefits of Tornado Shelters," Land Economics, University of Wisconsin Press, vol. 81(1).
    7. Viscusi W. Kip, 2019. "The Mortality Cost Metric for the Costs of War," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 25(3), pages 1-10, September.
    8. Rackwitz, Rüdiger, 2006. "The effect of discounting, different mortality reduction schemes and predictive cohort life tables on risk acceptability criteria," Reliability Engineering and System Safety, Elsevier, vol. 91(4), pages 469-484.
    9. Glenn C. Blomquist, 2004. "Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy," Review of Economics of the Household, Springer, vol. 2(1), pages 89-110, March.
    10. Brorsen, B. Wade & Lehenbauer, Terry & Ji, Dasheng & Connor, Joseph, 2002. "Economic Impacts Of Banning Subtherapeutic Use Of Antibiotics In Swine Production," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(3), pages 1-12, December.
    11. Raucher Robert S. & Rubin Scott J & Crawford-Brown Douglas & Lawson Megan M., 2011. "Benefit-Cost Analysis for Drinking Water Standards: Efficiency, Equity, and Affordability Considerations in Small Communities," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(1), pages 1-24, January.
    12. Fluixá-Sanmartín, Javier & Escuder-Bueno, Ignacio & Morales-Torres, Adrián & Castillo-Rodríguez, Jesica Tamara, 2020. "Comprehensive decision-making approach for managing time dependent dam risks," Reliability Engineering and System Safety, Elsevier, vol. 203(C).
    13. Gerdtham, Ulf-G. & Johannesson, Magnus, 2005. "Business cycles and mortality: results from Swedish microdata," Social Science & Medicine, Elsevier, vol. 60(1), pages 205-218, January.

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