How US Government Agencies Value Mortality Risk Reductions

Each year, US government agencies promulgate health and safety regulations that impose hundreds of millions of dollars of costs on the national economy. A key issue in developing these regulations is determining whether the value of the associated risk reductions and other benefits exceeds the value of the resources diverted from other purposes. This article explores one component of this benefit-cost comparison: the approaches used by federal agencies to estimate the value of changes in the risk of premature mortality. After introducing key concepts, the article describes current federal agency practices. It first summarizes US government-wide guidelines for valuing mortality risk reductions and then discusses the practices of individual agencies in more detail. It focuses largely on the approaches used by the US Environmental Protection Agency (EPA). The EPA is responsible for a substantial proportion of all federal life-saving regulations, and mortality risk reductions account for the majority of the monetized benefits for most of its economically significant rules.