Departmental guidance: Treatment of the value of preventing fatalities and injuries in preparing economic analyses

Abstract

This guidance from the Department of Transportation publishes the department’s recommended methodology for calculating the value and impact of preventing fatalities and injuries. The method is based on previous Office of Management and Budget (OMB) and DOT decisions and analyses. A Value of Statistical Life (VSL) is the cost individuals are willing to bear to reduce risks that could lead to death. Agencies can use this value to compare benefits and costs of various regulations and proposals for economic investments. To measure VSL, the willingness of people to pay to avoid risks leading to fatalities or injuries is assessed. Safety improvements must be paid for, and it is useful to know how much people are willing to pay to obtain them. This is measured by estimating the value people assign to incremental improvements in safety. This guidance provides factors to measure such willingness to pay in monetary terms. – AI-generated abstract.