Valuing Health and Safety: Some Economic and Psychological Issues

When making decisions about the allocation of scarce social resources, how should we weigh the benefits (or disbenefits) of changes in the health or safety of members of the population? The conventional (economic) wisdom is that the preferences of the affected population should be elicited — in the form of their willingness to trade off wealth for health/safety — and should then be incorporated into some overall cost-benefit analysis.

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