Measuring the Monetary Value of Lifesaving Programs
Formal analysis of the value of public life-saving programs has tended to employ a livelihood, or human capital, basis of valuation. Although the livelihood approach is subject to significant criticism on conceptual grounds, it continues to be used frequently. This paper discusses five alternative approaches to valuation in life-saving and disability-saving programs and strengths and weaknesses of each. The approaches are (1) values implicit in past decisions of the political sphere; (2) explicit statements of political representatives or their designees; (3) human capital, or livelihood-saving approach; (4) implicit values of individuals; and (5) explicit statements of value by individuals. It is concluded that important conceptual and empirical differences exist between these approaches and that selection of a particular method involves tradeoffs between ease of application and conceptual soundness. Methodologies based on livelihood-saving and individual preferences are most attractive on most accounts but severe conceptual shortcomings in the livelihood-saving approach suggest an active search for an alternative is needed.