The EPA came up with this number based on what people are paid to avoid certain risks. The article explains it better, but it seems pretty random to me. Why this matters is actually important, however. The article explains:
When drawing up regulations, government agencies put a value on human life and then weigh the costs versus the lifesaving benefits of a proposed rule. The less a life is worth to the government, the less the need for a regulation, such as tighter restrictions on pollution.Some environmentalists believe that this administration changed the monetary value of life to avoid more environmental regulation. I would not be surprised if this were true.
Consider, for example, a hypothetical regulation that costs $18 billion to enforce but will prevent 2,500 deaths. At $7.8 million per person (the old figure), the lifesaving benefits outweigh the costs. But at $6.9 million per person, the rule costs more than the lives it saves, so it may not be adopted.
What got me excited about this whole thing is that this is Administrative Law. EPA deciding environmental regulations, State and Parks promulgating rules about nude beaches (and being sued when they don't have public hearings- LA Times article), and what I deal with at work-- California Department of Education bossing around school districts.
Now that Alex is taking an administrative law class, I am working on it all day long, and I am editing administrative law review papers, I feel like it's all admin, all the time. And I kind of like it.