USDOT Increases ‘Value of a Statistical Life’ to $11.6 MILLION
Washington D.C. – The United States Department of Transportation (USDOT) has increased the amount the Department says Americans are willing to pay to reduce one transportation-related fatality.
Departmental guidance on valuing the reduction of fatalities and injuries by regulations or investments has been published periodically by the Office of the Transportation Secretary since 1993.
The USDOT measures the benefit of preventing a fatality by what is conventionally called the Value of a Statistical Life (VSL), defined as the additional cost that individuals would be willing to bear for improvements in safety (that is, reductions in risks) that, in the aggregate, reduce the expected number of fatalities by one.
According to newly issued USDOT guidance, the VSL now sits at $11.6 million, up from $10.9 million in 2019.
In updating the guidance, the USDOT noted inflationary factors including “changes in prices and real incomes” contributed to the increase in the VSL.
It’s important to note that the VSL is often used by regulators and lawmakers as a tool to pursue safety measures, as well as sometimes by litigators when establishing a baseline value of compensatory and punitive damages in lawsuits involving fatalities.
“The values we adopt here do not establish a threshold dividing justifiable from unjustifiable actions; they only suggest a region where officials making these decisions can have relatively greater or lesser confidence that their decisions will generate positive net benefits,” the USDOT’s guidance states.
For more on how the VSL is calculated, click HERE.