Valuing lives equally: Distributional weights for welfare analysis

E. Somanathan

Discussion Papers from Indian Statistical Institute, Delhi

Abstract: Cost-benefit analysis as performed by governments and public-sector organisations typically applies equal weights to changes in incomes accruing to individuals from projects even when there is no proposal to compensate losers. One reason for the use of equal weights despite the absence of a theoretical justification for this practice is that all weights appear arbitrary. This note proposes the use of weights based on two axioms: (1) that all lives should be equally valued, and (2) that the monetary value attached to a person's life should be his or her own. This implies weights that are proportional to the reciprocals of the values of statistical lives

Keywords: cost-benefit analysis; social welfare; value of life; distributional weights (search for similar items in EconPapers)
JEL-codes: D60 D61 D63 (search for similar items in EconPapers)
Pages: 5 pages
Date: 2003-03
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Journal Article: Valuing lives equally: Distributional weights for welfare analysis (2006)
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