A rose by any other name

In the latest AERE Newsletter, AERE President Trudy Cameron argues that the ill-named "value of statistical life" should be recalled "willingness to pay for a microrisk reduction." Here is the conclusion:

The consumers of our research need to be steered away from the mistaken impression that economists presume to decide, on behalf of society, the intrinsic value of a human being. If you have any doubts at all about the damage to economists reputations from misinterpretation of the concept of a VSL, or the amount of wasted reputational capital and person-hours at various government agencies every time another sensational article about the VSL appears in the press, please take a look at the seventeen-page compendium of quotes entitled "One Hundred Reasons Why We Should Replace the Value of a Statistical Life (VSL) with Willingness to Pay for a Microrisk Reduction" (http://www.uoregon.edu/~cameron/WTPM/VSL_confusion.pdf).

And let's not forget the VSL on the Colbert Report.

Comments

[Michael Roberts]

Yeah, I've heard this argument at least a dozen times. Kip Viscusi says this a lot, too.

It's the token apology for trying to answer such an ambitious question.

But I think there is a huge logical inconsistency with this conclusion: Rational choice, which is necessary for eliciting values of any kind, holds that preferences are linear in probability. If preferences are linear in probability, then marginal changes reflect total changes. It IS the value of life.

So, apology not accepted. Either the rational basis for the valuation is invalid or the huge marginal apology is invalid.

If I'm wrong, someone please correct me.