Ann, this is why you cannot do a cost benefit analysis on this issue-
Cost-benefit analysis is incapable of delivering what its proponents (Ann Motte)promise. First, cost-benefit analysis cannot produce more efficient decisions because the process of reducing life, health, and the natural world to monetary values is inherently flawed. I don't know what your life is worth but mine is priceless.
Efforts to value life illustrate the basic problems. Cost-benefit analysis implicitly equates the risk of death with death itself, when in fact they are quite different and should be accounted for separately in considering the benefits of regulatory actions (a police department).
Cost-benefit analysis also ignores the fact that citizens are concerned about risks to their families and others as well as themselves, ignores the fact that market decisions are often very different from political decisions, and ignores the incomparability of many different types of risks to human life. The same kinds of problems arise in attempting to define in monetary terms the benefits of protecting human health and the environment.
More problematic is this step in the analysis:
monetizing the benefits achieved by the regulation. Since there are no natural prices for a healthy environment, cost-benefit analysis requires the creation of artificial ones. Economists create artificial prices for health and environmental benefits by studying what people would be willing to pay for them. One popular method, called "contingent valuation," is essentially a form of opinion poll. Researchers ask a cross-section of the affected population how much they would be willing to pay to preserve or protect something that can't be bought in a store.
An alternative method of attaching prices to unpriced things infers what people are willing to pay from observation of their behavior in other markets. To assign a dollar value to risks to human life, for example, economists usually calculate the extra wage - or "wage premium" - that is paid to some workers who accept more risky jobs. If workers understand the risk and voluntarily accept a more dangerous job, then they are implicitly setting a price on risk by accepting the increased risk of death in exchange for increased wages. What does this indirect inference about wages say about the value of a life?
A common estimate in recent cost-benefit analyses is that avoiding a risk that would lead, on average, to one death is worth roughly $6.3 million. (Some estimates are much lower than this, and go as low as $1 million or less; some are much higher, reaching $10 million or more.)