The science of value: Economic expertise and the valuation of human life in US federal regulatory agencies

Abstract

This article explores efforts to apply economic logic to human life. To do so, it looks at federal regulatory agencies, where government planners and policy makers have spent over a century trying to devise a scientifically sound way to measure the economic value of lives lost or saved by public programs. The methods they have drawn on, however, have changed drastically in the past 40 years, shifting from a ‘human capital’ approach based on models of economic productivity and producing relatively low dollar values to a ‘willingness-to-pay’ approach reflecting consumer choice and producing much higher values. Why, in an era of intense deregulatory pressures, did the valuation model that produced significantly higher estimates – making it easier to justify costly regulation – ultimately win out? This unlikely transition follows a shift in the nature of professional expertise dominating the federal bureaucracy during the 1970s and 1980s, as changing conceptions of health and safety regulation during this period gave academic economists the opportunity to make new claims about the exclusive authority of microeconomic theory for understanding the economic value of life in federal planning. Supporting this argument is a comparative case, the largely unsuccessful attempt to extend the willingness-to-pay model to the valuation of life in the courtroom. Pricing human life thus results not only from the renegotiation of moral boundaries around the economic logic of the market, but also from the reorganization of expert authority and the consolidation of scientific expertise around both the meaning and the measurement of value.