Futuribles Journal n° 404

Économie, emploi

The Value of Human Life in Economics


For many years France has been faced with a national debt that compels it now –and, no doubt, for a long time to come– to tighten its budget and control its spending as much as possible. In this context of long-term scarcity of budgetary resources, various economic and statistical instruments will have to be deployed to produce a rationalization of public expenditure. Among these, the technique that apportions a statistical value to human life could be used more systematically in the evaluation of public policy, ahead of actual decision-making. This Value of a Statistical Life (VSL) should not be understood as the value conferred on a particular human life, but as the amount the community is prepared to allocate to reduce a risk of death.

Nicolas Treich reminds us of this in this article, which aims to explicate the concept of the value of life in economics, to show how it is calculated and assessed empirically, and also what its role is (particularly in the Anglo-Saxon countries) in public decision-making. The point is that the VSL enables the impact of expenditure, regulation or investment on the risk of death to be evaluated, and thus enables trade-offs to be made. Clearly, these trade-offs are made at community level and still raise a number of questions (which the author reminds us of), particularly where fairness is concerned. Yet, given the budgetary constraints mentioned above, in an increasing number of political decisions, VSL will probably be incorporated into the decision-support criteria. Hence the need for a clear understanding of how it is arrived at and how this tool can be combined with other risk-management approaches and instruments.

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