Can You Guess How Much The Government Says A Human Life Is Worth? Here's A Clue: It's Nearly 70x's The Average Household's Net Worth

Government agencies like the FDA and EPA have actually put a price tag on human life. It sounds cold but it's true. When these agencies make decisions about regulations, they need to figure out if the benefits, like saving lives, outweigh the costs, such as compliance for companies. To do that, they have to crunch some serious numbers. According to the U.S. Department of Health and Human Services (HHS), the going rate for a human life in 2024 is $13.1 million.

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It's a number that might make you do a double take, especially when the median U.S. household net worth is $192,900 based on the Federal Reserve's 2022 Survey of Consumer Finances. But this figure is what the government uses to decide how much to spend on programs, regulations and safety measures. Basically, if a new rule costs more than $13.1 million per life it might save, it gets a hard second look.

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In 2017, Bloomberg reported that the government valued life at about $10 million. Over the years, this figure has climbed as inflation and wages increased. The Environmental Protection Agency (EPA), for example, uses detailed studies that factor in things like wages and people's willingness to pay for safety. These calculations bring today's central estimate up to $13.1 million.

To put that in perspective, the average life insurance policy is valued at around $160,000, which is a big gap compared to the government's valuation. And it's not just the EPA – most federal agencies, including the Department of Transportation (DOT) and HHS, use similar figures when running cost-benefit analyses for new regulations. As wages and the willingness to pay for safety measures increase, so does the government's value of life.

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In 2007, the Department of Transportation considered a rule requiring automakers to install rear seat belt reminders in every car. This regulation was estimated to save 44 lives per year. However, automakers projected that it would cost $325 million annually to implement the change.

Back then, the DOT valued a life at about $6.4 million. The math didn't add up: the costs outweighed the potential benefits, so the rule didn't pass. Fast forward to 2024 and the value of life has risen to $13.1 million. With this updated figure, the benefits of saving 44 lives would far outweigh the costs, making the rule more likely to pass today.

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Not everyone is on board with the idea of valuing life at $13.1 million. Some economists, like Ryan Bosworth from Utah State, argue that people don't always think rationally about risk and safety. He points out that someone might splurge on a top-rated child car seat then speed down the highway later. Nobel Prize-winning economist Richard Thaler, in fact, came up with a much lower figure for the value of life in his research – around $1.5 million in today's dollars.

Still, the $13.1 million figure is sticking and it plays a significant role in regulatory decisions that save lives. With inflation and rising wages, the government's value of life seems likely to continue increasing.

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