The cost-per-life-saved cutoff for safety-enhancing regulations

This article develops a model of the conditions under which risk regulation s that are too expensive have net adverse health effects. Two principal com ponents of this relationship are the implicit value of life and the income elasticity of risky behaviors. Using new empirical estimates for the income elasticity of many of the most consequential risk-related behaviors, our r esults imply that a $15 million decrease in income is associated with the l oss of an additional statistical life. Regulations that cost more than $15 million per expected life saved will have counterproductive effects on indi vidual mortality. (JEL L51, I12, J17).