Revised Departmental Guidance on Valuation of a Statistical Life in Economic Analysis
About this Document
The benefit of preventing an injury or fatality is measured 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. The value of a statistical life is a critical factor in evaluating the benefits of transportation infrastructure investment and rulemaking initiatives. Reduction of injuries and fatalities in passenger or freight transportation is a major purpose of investments, and rules that slow travel may sometimes enhance safety. As the Department expands its use of benefit-cost analysis in evaluating competitive funding applications under such programs as the TIGER Grant program and the High-Speed Intercity Passenger Rail program, it is essential to have appropriate, well-reasoned guidance for valuing safety benefits.
Department guidance on valuing the reducation of fatalities and injuries by regulations or investments has been published periodically by DOT since 1993. The present memorandum adjusts these values for use in the current year. Income data used in this guidance are derived from public and regularly updated sources that allow the Department to update the values annually.