Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?
A)The benefits are usually easier to measure than the costs.
B)Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs.
C)Estimating the value of a human life is difficult but necessary to evaluate the proposal.
D)Both a and b are correct.

Question

Quizplus · Accepted Answer

Estimating the value of a human life is difficult, but it is necessary to evaluate the proposal accurately. The benefits of increasing traffic safety can be measured through reduced accidents and fatalities, but the costs of implementing the traffic barriers need to be evaluated in monetary terms. This involves estimating the value of a statistical life (VSL), which represents how much individuals are willing to pay to reduce risks to their lives.

Suppose That Policymakers Are Doing Cost-Benefit Analysis on a Proposal