TITLE
"Risk, Willingness-to-Pay, and the Value of a Human Life," Journal of Insurance Issues, William P. Jennings and Penelope R. Jennings. Fall 2000, Vol. XXIII, No. 2, pp. 180-184. Entire article in Acrobat format.

ABSTRACT
Empirical estimates of the value of a life based on the willingness-to-pay concept have been used in formulating public policy decisions involving safety and environmental regulations and by some state courts as a measure of the legal value of a human life in personal injury cases. The basic idea of the willingness-to-pay concept is that by examining how people value small risk changes we can estimate the value of the entire life. The paper argues that the use of the willingness-to-pay concept is theoretically inappropriate and demonstrates that because people are risk averse, willingness-to-pay estimates of the value of a life will generally overstate the relevant economic value.