Matt Adler (Duke): “The Ethical Value of Fatality Risk Reduction: Utilitarianism, Prioritarianism, Cost-Benefit Analysis”

Abstract: The dominant technique for valuing fatality risk reduction, in applied economics and governmental practice, is cost-benefit analysis (CBA).  CBA, in general, evaluates governmental policies by summing individuals’ monetary equivalents. It evaluates risk-reduction policies via the so-called “value of statistical life,” which is a conversion factor from risk reduction to money.  In an ongoing research project, I am working with collaborators to compare how CBA values risk reduction with the “social welfare function” (SWF) framework, using either a utilitarian or a prioritarian SWF.  In particular, we look at the relative ethical valuation of risk reduction, for individuals of different incomes, levels of background risk, or ages, as per CBA, utilitarianism, and “ex ante” and “ex post” prioritarianism.  We examine these questions of relative valuation both analytically and empirically.  Our findings both illuminate the implications of utilitarianism and prioritarianism for policy choice, and—in demonstrating significant differences between these approaches and CBA—call into question the ethical justifiability of that technique.