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Government agencies use the statistical value of a life to weigh the benefits of a regulation against the costs to the public - the same people who would benefi

Government agencies use the statistical value of a life to weigh the benefits of a regulation against the costs to the public - the same people who would benefit from the regulation. Would a new safety requirement for cars be worth it if it added $500 to the price of every new car? They might use the value of a life to help answer that question. This is very different than the recall story, because in that scenario there is no cost to the public at all, only to the corporation. When government agencies make rules about product recalls, they do not try to balance the benefit to the public against the cost to the recalling company, that would be insane. See the DoT's own guidance here: https://www.transportation.gov/sites/dot.gov/files/2021-03/DOT%20VSL%20Guidance%20-%202021%20Update.pdf https://www.transportation.gov/sites/dot.gov/files/2021-03/D.... They do not at all use this figure in the same way that a profit-driven entity does. > The benefit of preventing a fatality is measured by what is conventionally called the Value of a Statistical Life, 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 word "individuals" is very important in this definition.

gruez 2y ago
>This is very different than the recall story, because in that scenario there is no cost to the public at all, only to the corporation. ...assuming they don't pass it on to the customers
- burkaman 2y ago
  That would be illegal, and "the public" is much larger than just the customers of a particular company. This is beside the point though. The government asks "would the average person be willing to pay $x to lower their chance of death by y%". The corporate executive asks "would I be willing to pay >$0 to lower their chance of death by y%". "Some of you may die, but it's a sacrifice I am willing to make."
  - krisoft 2y ago
    > That would be illegal What do you mean it would be illegal? Obviously the corporation prices in all the expected future recalls into their prices. Yes they won't charge you for the recall, but the future costumers will pay higher prices if in the corporation's calculation the chance of recalls (or the cost of doing them) is increased.
    - cycomanic 2y ago
      > > That would be illegal > What do you mean it would be illegal? Obviously the corporation prices in all the expected future recalls into their prices. Yes they won't charge you for the recall, but the future costumers will pay higher prices if in the corporation's calculation the chance of recalls (or the cost of doing them) is increased. Why oh why do I have to read this on HN again and again? The price of a good does not primarily depend on the cost to make it. So no Boeing can't easily raise their future prices to account for the cost of saving lifes, because there are competitors.
      - Georgelemental 2y ago
        > because there are competitors Unfortunately, in Boeing's case there aren't very many competitors.
      - idontpost 2y ago
        [dead]
      - krisoft 2y ago
        Ok? Does that change the legality of what I described? I don't think so. And that is what I talked about. Raising their prices to cover the recall would not be illegal. Maybe it would be bad business for them, maybe not. I haven't said anything about that. > Why oh why do I have to read this on HN again and again? This is unnecessarily confrontational.
  - gruez 2y ago
    >That would be illegal As the other commenter has mentioned, it's passed on via higher prices in the future. >This is beside the point though. The government asks "would the average person be willing to pay $x to lower their chance of death by y%". The corporate executive asks "would I be willing to pay >$0 to lower their chance of death by y%". "Some of you may die, but it's a sacrifice I am willing to make." Okay, but surely you don't agree that Boeing should spend infinite amounts of money making their planes safe? For instance we don't install backup engines on the off chance that all 2 engines fail. That's all I'm trying to argue, that the cold calculation/cost benefit analysis as mentioned in the OP isn't where Boeing went wrong, it's that they they undervalued the value of a human life. This was specifically mentioned in my original comment.
- enragedcacti 2y ago
  If they could have charged more for the car they already would have. A recall only affecting one make or model won't have a large effect on the profit-maximizing price of the car because the value proposition of the car hasn't changed (or got worse because of perceived unreliability). The cost would then be born by the company and not the consumer.
- close04 2y ago
  They could make products or services more expensive but then manufacturers with many recalls would end up being prohibitively expensive. Each person can just choose individually a different manufacturer from the many options, one being "none at all". But you only get one government, it takes a majority to choose, and once chosen you're bound to its directions. So not the same thing at all.
- hatenberg 2y ago
  Competition is the antidote to passing it on, which is why regulatory intervention against concentration is critical. Left to it's own devices, competition disappears in capitalism.

gruez 2y ago

>This is very different than the recall story, because in that scenario there is no cost to the public at all, only to the corporation. ...assuming they don't pass it on to the customers

burkaman 2y ago
That would be illegal, and "the public" is much larger than just the customers of a particular company. This is beside the point though. The government asks "would the average person be willing to pay $x to lower their chance of death by y%". The corporate executive asks "would I be willing to pay >$0 to lower their chance of death by y%". "Some of you may die, but it's a sacrifice I am willing to make."
- krisoft 2y ago
  > That would be illegal What do you mean it would be illegal? Obviously the corporation prices in all the expected future recalls into their prices. Yes they won't charge you for the recall, but the future costumers will pay higher prices if in the corporation's calculation the chance of recalls (or the cost of doing them) is increased.
  - cycomanic 2y ago
    > > That would be illegal > What do you mean it would be illegal? Obviously the corporation prices in all the expected future recalls into their prices. Yes they won't charge you for the recall, but the future costumers will pay higher prices if in the corporation's calculation the chance of recalls (or the cost of doing them) is increased. Why oh why do I have to read this on HN again and again? The price of a good does not primarily depend on the cost to make it. So no Boeing can't easily raise their future prices to account for the cost of saving lifes, because there are competitors.
    - Georgelemental 2y ago
      > because there are competitors Unfortunately, in Boeing's case there aren't very many competitors.
    - idontpost 2y ago
      [dead]
    - krisoft 2y ago
      Ok? Does that change the legality of what I described? I don't think so. And that is what I talked about. Raising their prices to cover the recall would not be illegal. Maybe it would be bad business for them, maybe not. I haven't said anything about that. > Why oh why do I have to read this on HN again and again? This is unnecessarily confrontational.
- gruez 2y ago
  >That would be illegal As the other commenter has mentioned, it's passed on via higher prices in the future. >This is beside the point though. The government asks "would the average person be willing to pay $x to lower their chance of death by y%". The corporate executive asks "would I be willing to pay >$0 to lower their chance of death by y%". "Some of you may die, but it's a sacrifice I am willing to make." Okay, but surely you don't agree that Boeing should spend infinite amounts of money making their planes safe? For instance we don't install backup engines on the off chance that all 2 engines fail. That's all I'm trying to argue, that the cold calculation/cost benefit analysis as mentioned in the OP isn't where Boeing went wrong, it's that they they undervalued the value of a human life. This was specifically mentioned in my original comment.
enragedcacti 2y ago
If they could have charged more for the car they already would have. A recall only affecting one make or model won't have a large effect on the profit-maximizing price of the car because the value proposition of the car hasn't changed (or got worse because of perceived unreliability). The cost would then be born by the company and not the consumer.
close04 2y ago
They could make products or services more expensive but then manufacturers with many recalls would end up being prohibitively expensive. Each person can just choose individually a different manufacturer from the many options, one being "none at all". But you only get one government, it takes a majority to choose, and once chosen you're bound to its directions. So not the same thing at all.
hatenberg 2y ago
Competition is the antidote to passing it on, which is why regulatory intervention against concentration is critical. Left to it's own devices, competition disappears in capitalism.