What is meant by "the value of a statistical life"? Why is it calculated?How is it used by policymakers?
What will be an ideal response?
The value of a statistical life is the implied value of life from individual choices between options with different but small probabilities of fatality risk.Put another way, it is the money value of a human life saved, or the economic value of reducing risks to life through policy decisions. This can be inferred from the decisions of governments and consumers.However, the value of a statistical lifeis not intended to be seen as a price tag on human life. Rather, it is useful to policymakers in making decisions about which public projects—roads, bridges, dams—to undertake.As such, it can be employed as the basis of cost-benefit analysis, as well as in deciding how much people need to be compensated for certain risks that they take.
A-head: ECONOMIC TOOLS TO VALUE HUMAN LIFE
Concept: Value of a statistical life
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