Prices convey information.

Giving Life a Price

by Elaine Schwartz    •    Feb 19, 2011    •    684 Views

The people at OSHA (Occupational Safety and Health Administration) have been watching “Spider-Man.” Because of actors’ injuries during performances, the federal agency that monitors workplace safety went to Broadway.

Should they?

It is all about benefit and cost. Frequently, though, benefit and cost are tough to measure. For “Spider-Man,” on the benefit side, actors and audiences will be safer. Maybe the spillover is more attention to safety at other performances. Maybe an actor’s mother will not worry. Perhaps future medical expenses will be less. And perhaps they will be saving a life. On the cost side, there is the expense of running OSHA. For “Spider-Man’s” producers, compliance could involve the dollars spent to revise procedures. Also, the cost takes us to the intangibles like a less entertaining performance.

You might want to look here for comments from Conan O’Brien and Steve Martin about “Spider-Man’s” problems.

The Economic Lesson

Because many regulations are supposed to save lives, we have to compare the cost of implementing them to the good they will do. We have to place a money value on both sides of the equation even if one side is a life. Then, by knowing the value of statistical life (VSL), we can assess the opportunity cost of saving a life.

What is a life is worth? One expert says $7 to $12 million.

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