Uses
Since resources are finite, tradeoffs are inevitable, even regarding potential life-or-death decisions. The assignment of a value to individual life is one possible approach to attempting to make rational decisions about these tradeoffs.
When deciding on the appropriate level of healthcare spending, a typical method is to equate the marginal cost of the healthcare to the marginal benefits received. In order to obtain a marginal benefit amount, some estimation of the dollar value of life is required.
In risk management activities such as in the areas of workplace safety, and insurance, it is often useful to put a precise economic value on a given life. There can be no such thing as a perfectly safe or risk free system—one can always make a system safer by spending more money. However, there are diminishing returns involved.
In transportation modes it is very important to consider the external cost that is paid by the society but is not calculated, for making it more sustainable.
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