You might think this is coming from our old friend, CarsCauseCancer, but not this time.
Today I was reading Michael Sandel’s Justice: What’s the Right Thing to Do? when I came to the following passage:
...the use of the automobile exacts a predictable toll in human lives – more than forty thousands (sic) deaths annually in the United States. But that does not lead us as a society to give up cars. In fact, it does not even lead us to lower the speed limit. During an oil crisis in 1974, the U.S. Congress mandated a national speed limit of fifty-five miles per hour. Although the goal was to save energy, an effect of the lower speed limit was fewer traffic fatalities.
In the 1980s, Congress removed the restriction, and most states raised the speed limit to sixty-five miles per hour. Drivers saved time, but traffic deaths increased. At the time, no one did a cost-benefit analysis to determine whether the benefits of faster driving were worth the cost in lives. But some years later, two economists did the math. They defined one benefit of a higher speed limit as a quicker commute to and from work, calculated the economic benefit of the time saved (valued at an average wage of $20 an hour) and divided the savings by the number of additional deaths. They discovered that, for the convenience of driving faster, Americans were effectively valuing human life at a rate of $1.54 million per life. That was the economic gain, per fatality, of driving ten miles an hour faster.* Advocates of cost-benefit analysis point out that by driving sixty-five miles an hour rather than fifty-five, we implicitly value human life at $1.54 million....
*Orley Ashenfelter and Michael Greenstone, “Using Mandated Speed Limits to Measure the Value of a Statistical Life,” Journal or Political Economy 112, Supplement, (February 2004): S227-67.
My question to all of you is: Do you think this number ($1,540,000) is too low, too high, or just right? What monetary value would you assign to your life?