Responding to the value of statistical life (i.e., value of reducing mortality) "markdown"

From the inbox:

If you haven't seen it yet, today's post features an article about the EPA reducing their official value of a statistical life (linked ...).  To me, the headline, and probably a good chunk of the article, seems pretty misleading in explaining what statistical lives are all about.  At least two of the quoted experts give the topic justice but overall I am left with "your life = x dollars". Personally, I'm not indifferent between several million dollars and losing my life.  What do you think about this article? What do you think or know about the EPA's decision? Also, I don't recall an env-econ 101 installment on this issue; if there isn't one, it would certainly be a good addition.

Here is a thought based on a comment I left at EconomistMom.com in response to the WaPo article on the value of statistical life (VSL).

I think it is important to remember what happens when economists don’t provide input about the value of reducing mortality (maybe that is a better term than VSL) for policy analysis. Decisions are made that reflect a wide range of societal values and implicitly put bogus numbers on values of life, ranging from hundreds of thousands (damning good policy) to billions (passing bad policy). See:

George Van Houtven and Maureen L. Cropper, "When is a Life Too Costly to Save? The Evidence from U.S. Environmental Regulations", Journal of Environmental Economics and Management, Volume 30, Issue 3, May 1996, Pages 348-368. [Link to Abstract at Science Direct]

Another thing, based on the methods used to come up with numbers for the value of mortality reductions, there is no reason why the values should fall with methodological refinement. If economists and others are better able to come up with dollar-risk tradeoffs the policy process should incorporate the improved estimates. I'm not sure what improved estimates the EPA found, but we shouldn't jump to conclusion that the lower VSL is due to the environmental politics of recent years.

I'm guessing an ENV-ECON 101 VSL installment will be forthcoming.