Chapter 1 - Values of losses of life and life quality in social costs: the basics

Abstract

Human costs, that is losses of life and life quality are the major costs of accidents to society. This important component of social cost is introduced in this chapter along with other components. This chapter briefly discusses the contents of the book and what is expected in other chapters. It briefly describes how the valuation of human costs started with valuing the productive value of individuals; recognition of the value of being alive and the cost of pain and suffering due to fatalities and injuries; and development of the concept of value of statistical life or the value of preventing a statistical fatality. This chapter describes the estimation methods, their limitations and how these can influence the social costs of accidents and, consequently, the resource allocation decisions. These components of human costs, though initially estimated for accidents in most cases, are applicable to determine the social costs of diseases. Therefore these costs are referred to for both health and safety areas.