Regulation Policy

What's The Value Of A Human Life?

Is a human life so precious that its cost is incalculable? It would be nice to think so, but for purposes of cost-benefit analysis -- whether by government or the private sector -- some price must be put on it.

Courts and federal regulatory agencies place a value on human life all the time. But it strikes some people as unseemly when companies do it in the course of deciding whether a safety device might be more expensive than its potential benefit.

A Florida court is now hearing a case brought against General Motors which illustrates the problem.

  • In 1991, a trailer broke off a pickup truck and slammed into an Oldsmobile Cutlass station wagon, puncturing the car's gas tank and killing a 13-year-old boy in the ensuing fire.

  • His parents sued GM and their lawyers introduced an internal GM memo that calculates that there are a "maximum of 500 fatalities per year in accidents with fuel- fed fires where the bodies were burnt," and goes on to put a $200,000 valuation on each fatality.

  • The memo calculates that each fatality costs GM "$2.40 per automobile in current operation."

  • A plaintiffs' witness alleges GM did not remedy the fuel tank defect which caused the fire, since it would cost the company $4.50 per vehicle to do so.

Analysts admit the trade-off may seem callous, but thousands of such decisions like it are necessary or cars would look like military tanks and be priced in the stratosphere.

Fatal rear-impact collisions with fire damage occur at a rate of one for every 23 billion miles traveled by owners of the station wagon in question. Legal observers point out that since GM is already being sued over the issue of side-mounted fuel tanks, moving tanks to another location on the car is not a viable option.

Advocates of cost-benefit analysis point out that some activities -- such as driving -- are inherently dangerous and courts and juries must recognize that people accept those risks. Producers must remain free to weigh the costs against those risks.

Source: Max Boot, "Your Money or Your Life? That Depends," Wall Street Journal, March 4, 1998.

Home | Support Us | All Issues | Social Security | Debate Central | Contact Us

Dallas Headquarters: 12770 Coit Rd., Suite 800 - Dallas, TX 75251-1339 - 972/386-6272 - Fax 972/386-0924
Washington Office: 601 Pennsylvania Ave. NW, Suite 900 South Building - Washington, DC 20004 - 202/220-3082 - Fax 202/220-3096
© 2001 NCPA