How Do Economists Go About Estimating the Value of Life

question 20

Multiple Choice

How do economists go about estimating the value of life in the context of job safety regulation?

• A) They add up the cost of implementing all of the job safety features in firms that have excellent job safety records.
• B) They estimate the compensating wage differential that workers in a dangerous occupation receive for the level of risk that they assume, and then extrapolate that figure for a scenario in which the risk is reduced to zero.
• C) They take the amounts that are rewarded to victims' families in wrongful death law suits.
• D) They estimate the difference between profits that are earned by firms with dangerous working conditions versus those with safer working conditions.
• E) They never engage in such an exercise, as life is infinitely precious and thus no value can be placed upon it.

---

Definitions:

Contingent

Dependent on or conditioned by something else; in organizational behavior, often refers to rewards or responses that are based on specific performance criteria.

Mintzberg

Refers to Henry Mintzberg, a renowned academic and author known for his work on business and management structures, strategy, and organizational effectiveness.

Managerial Role

The specific behaviors and tasks required from a manager, including planning, organizing, leading, and controlling organization resources.

Spokesperson

An individual authorized to speak on behalf of an organization, representing its views and messages to the public or specific audiences.