Saturday, Dec. 27, 2008 – The more than 800 people who died prematurely this year from breathing dirty San Joaquin Valley air are worth $6.63 million each, economists say.
Relatives don’t collect a dime, but society is willing to pay someone this price. Confused? You’re not alone.
The figure — which surfaced in a report last month — is commonly misunderstood. People sometimes think it means missed wages, a payout from some global life insurance policy or health expenditures.
After hearing the amount, a government wonk privately suggested cleaning up the Valley’s air and using the savings to balance the state’s budget. The grand total for more than 800 lost lives is $5.2 billion.
But this is no pile of cash.
It’s a statistic — the amount of money that society would be willing to spend on preventing premature death due to bad air, economists say. Government agencies routinely use such estimates to establish new safety regulations.
Such a price tag stirs emotions. To some people, it sounds too high. To respiratory therapist Kevin Hamilton, a health advocate in air-quality issues, the number seems low.
“How do you place a value on my wife?” he asked. “How do you represent hope and dreams? It doesn’t sound like there’s nearly enough value built into it.”
The value is based on decades of studies that set value on human life for decision-making agencies, such as the U.S. Environmental Protection Agency and the Department of Transportation.
A central factor in the value: the amount of extra money industries are willing to pay for more risky jobs. Another part of the equation is how much less money people would accept to get a safe job.
For years, these statistical values on human life have been used in cost analyses of new federal cleanup or safety rules.
“It’s just like any other risk in society,” said economist Jane V. Hall of California State University, Fullerton. “When we choose to pay for widening a bridge, for instance, we do it based on reducing the risk. We do it to protect human life. We need to know the statistical value of a life.”
Hall, fellow economist Victor Brajer from Cal State Fullerton and Frederick Lurmann at Sonoma Technology used such a statistic in a report they released last month on the benefits of meeting federal standards in the Valley and the South Coast Air Basin.
The death and dollar figures are staggering, by most accounts. There are 3,800 premature deaths each year in the Valley and the South Coast Air Basin, which have the worst air pollution in the nation.
Using established studies from the California Air Resources Board, the economists determined the air-related deaths occur about 14 years sooner than they should.
The annual value of those early deaths is $24 billion, economists said. That hefty value should help influence decisions on rules and investments in air cleanup, they said.
For instance, the number helps justify a $5.5 billion cost for cleaning up on-road diesel truck and bus fleets in California. Diesel trucks and buses are among the biggest sources of toxic diesel particles and ozone-forming oxides of nitrogen.
But don’t get the idea that the value of life could be the basis of a lucrative lawsuit.
The $6.63 million doesn’t apply to the life of one individual, such as your uncle or your best friend. Economist Katie Winder, a professor at the University of California at Merced, said the value is not customarily part of lawsuits or other legal proceedings.
Said Winder, “The statistical value-of-life estimates don’t take into account variation between individuals in terms of education, productivity, age and other factors.”
Adding to the complexity and the confusion, the value does not remain the same for various federal agencies as they consider new safety regulations.
When the Department of Transportation changed child-restraint rules for motorists a few years ago, the cost of each life saved was pegged at between $1.5 million and $4.9 million, based on studies of what society would pay to protect the children.
At the San Joaquin Valley Air Pollution Control District, members of the public have incorrectly used the value as a health expense. Officials worry about the misunderstanding, saying the money is not real.
There are estimates of actual health costs and related spending included in the study from Hall, Brajer and Lurmann. But the estimates amount to a small fraction of the total cost of dirty air cited in the study.
Of the more than $6 billion in annual Valley cost for bad air, less than 15% applies to health expenditures and days missed for school and work.
But Hall said in the research that the value of life is real money. Industries are willing to pay more for dangerous jobs. People are willing to take less money for safer jobs.
For instance, a steel mill might pay $700 extra per year for a job with more risk. For a safer job, people would have to accept less money. That difference represents a way society values life.
“That is real money,” she said. “It shows how much money people would sacrifice for a safer job.”
The reporter can be reached at or (559) 441-6316.