Regulations to promote health and safety that are exceptionally costly relative to the expected health benefits may actually worsen health and safety, since compliance reduces other spending, including private spending on health and safety. Past studies relating income and mortality give estimates of the income loss that induces one death — a value that we call willingness-to-spend (WTS)-to be around $9 to $12 million. Such estimates help identify regulations that do not improve health and safety, and moreover, fail benefit-cost comparisons. WTS is a multiple of the willingness to pay to avert a statistical death. International data yield estimates of WTS and willingness-to-pay in different countries.
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The views of the authors do not necessarily reflect the views of the Office of Information and Regulatory Affairs or OMB. Thanks are due to Ivy Broder, Kenneth S. Chapman, Govind Hariharan, and W. Kip Viscusi for helpful comments. Some of this material is included in theRegulatory Program of the United States Government, April 1, 1992, March 31, 1993, of the Executive Office of the President.
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Lutter, R., Morrall, J.F. Health-health analysis: A new way to evaluate health and safety regulation. J Risk Uncertainty 8, 43–66 (1994). https://doi.org/10.1007/BF01064085