Cheapening the Value Of Life: The Bush Administration's Death Discount

The Bush administration recently added a new tool to its anti-environmental kit that could significantly change the way the government assesses and regulates environmental threats. The tool is a biased form of cost-benefit analysis that makes regulations appear less worthwhile by lowering the hypothetical monetary value of human life. Senior citizens are particularly at risk under this new approach, since many of the techniques can be used specifically to discount the life of the elderly when regulating some of the greatest threats to their health, such as air pollution.

Recently the administration has used this analysis in new air pollution control rules and proposed legislation that cater to industrial polluters at the expense of public health. Last fall, the Environmental Protection Agency featured this "alternative" analysis in its support documentation for the administration's air pollution legislation for power plants (see, and in its final rule for off-road engines like the ones used in snowmobiles. Both of these proposals would not adequately protect the public from soot, smog and other dangerous pollutants.

This novel approach was so tilted that the level of benefits calculated under this method was more than 90 percent less than under the usual EPA method, falling from the previously accepted standard value of $6.1 million per life saved to less than half a million dollars for many fatalities. What is more unsettling is that most of the reduction in benefits was due to lowering the estimate of the value of saving a human life, not to a change in the estimate of the number of lives that would be saved.

To lower the estimate for the value of lives saved under these proposals, the White House Office of Management and Budget (OMB) had EPA reduce its established value through a series of steps. One of the most startling steps was to count the value of saving the lives of Americans over 65 years old as worth less than two-thirds of the standard value assigned to people under 65 -- a percentage based on a flawed concept and an unsuitable study.

The main administration proponent for this kind of slanted analysis is John Graham, head of the OMB office that reviews regulations. In October 2001, Graham recommended that the National Academy of Sciences consider using a related calculus, called Quality Adjusted Life Years (QALY), when evaluating air pollution policies. The theory behind QALY is that the value of saving someone's life should be adjusted downward the older and more infirm he or she gets. But the theory behind QALY conflicts with more valid empirical studies that show that as people get older they do not value their lives any less than they did when they were younger. In any case, it is objectionable on its face if one believes in equal protection for all members of society.

More recently, Graham and OMB have proposed fundamental changes to the guidelines that agencies follow when conducting their reviews of the costs and benefits of regulations. One of the more notable recommended changes would have agencies shift from the standard statistical measure for the value of a life to a different concept, the Value of a Statistical Life-Year (VSLY). Like QALY, the concept of VSLY is biased against the elderly because it lowers the value of saving a life based largely on the numbers of years a person has left to live.

Seniors are not the only people whose lives would be cheapened by the Bush administration's new approach. Other administration techniques could apply to everyone. They include selectively excluding studies that heighten the estimate of people's willingness to pay for protection (in this case wage-risk studies) and discounting the value of saving people from cancer and other kinds of illnesses that are not immediately fatal. The administration also is only considering alternative techniques that would lower the value of life instead of approaches that might raise the standard estimate, such as shifting from assessments based on a current "willingness to pay" for safeguards to approaches based on a "willingness-to-accept" harms or risks.

The blatant one-sidedness of the administration's approach reveals its intention to only use methods that ratchet down the value of life to reduce the perceived benefits of regulation, and thereby minimize the steps industry must take to clean up pollution. Although the EPA claims that it ultimately did not use this biased approach in setting its standard for off-road engines, nothing prevents it from doing so in the future. Indeed the presence of this alternative analysis, however distorted, becomes a convenient hook for legal and legislative action hostile to environment protection.

In earlier analyses supporting the snowmobile rule and the administration's power plant bill, OMB made EPA produce an alternative analysis that calculated the value of saving the life of a 65-year-old senior as being only worth 63 percent of a younger person's life. Since then, Graham has claimed that the administration is no longer using a senior death discount. However, in a recent analysis supporting the proposed off-road diesel rule, the administration moved the senior death discount to what is called a "sensitivity" analysis at the end of the document and raised the value of a senior to 65 percent of that of a younger person. A sensitivity analysis is merely an alternative analysis by a different name, and a discount of 35 percent off the value of life is little better than 37 percent off.

The implications of discounting lives are quite significant. If, for example, the government decided the value of life is now worth less than a tenth of what is used to be, policymakers could decide to allow 10 times as many deaths from environmental pollution -- claiming the "benefits" were unchanged -- to keep costs down for industry. Such a review procedure could block federal agencies from adopting meaningful standards for a range of pollutants, and even set the stage for agencies to weaken effective environmental protections that are already in place.

The Natural Resources Defense Council is a national, non-profit organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. Founded in 1970, NRDC has more than 550,000 members nationwide, served from offices in New York, Washington, Los Angeles and San Francisco.