High-income people are willing to pay more thanlower-income people to avoid the risk of death.For example, they are more likely to pay for safetyfeatures on cars. Do you think cost–benefit analystsshould take this fact into account when evaluatingpublic projects? Consider, for instance, a rich townand a poor town, both of which are considering theinstallation of a traffic light. Should the rich town usea higher dollar value for a human life in making thisdecision? Why or why not?
High-income people are willing to pay more thanlower-income people to avoid the risk of death.For example, they are more likely to pay for safetyfeatures on cars. Do you think cost–benefit analystsshould take this fact into account when evaluatingpublic projects? Consider, for instance, a rich townand a poor town, both of which are considering theinstallation of a traffic light. Should the rich town usea higher dollar value for a human life in making thisdecision? Why or why not?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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High-income people are willing to pay more than
lower-income people to avoid the risk of death.
For example, they are more likely to pay for safety
features on cars. Do you think cost–benefit analysts
should take this fact into account when evaluating
public projects? Consider, for instance, a rich town
and a poor town, both of which are considering the
installation of a traffic light. Should the rich town use
a higher dollar value for a human life in making this
decision? Why or why not?
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