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Environmental Economics Reports All NCEE Web
Keywords Participating Organizations Report Details Published Output Summary This journal article argues that risk regulations directly reduce risks, but that they may produce offsetting risk increases. Regulated risks generate a substitution effect, as individuals' risk-averting actions will diminish. Recognition of these effects alters benefit-cost criteria and the value-of-life estimate pertinent to policy analysis. Particularly expensive risk regulations may be counterproductive. The expenditure level that will lead to the loss of one statistical life equals the value of life divided by the marginal propensity to spend on health. Regulations with a cost of $30 million to $70 million per life saved will, on balance, have a net adverse effect on mortality because of these linkages. The reference to the journal article can be found under published output above.
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