Valuing the Burden of Foodborne Illness in Regulatory Analysis

Introduction:  As required by Executive Order 12866 and strengthened by Executive Order 13563, regulatory agencies are required to perform impact analyses to determine the societal costs and benefits of any proposed regulatory action. Since the early 1990s, FDA has made use of the Quality of Well-Being scale and then the EuroQol- 5 Dimensions scale to value the full cost to victims of foodborne illness. Over this time period, the value applied to this cost, in the form of a value of a statistical life (VSL), has varied.

Purpose:  The purpose of this study was to demonstrate how evolving methods and changes to the VSL used can affect the net benefits of proposed regulatory actions in the realm of food safety.

Methods:  Acceptable values for a statistical life can range from $1 million to more than $20 million. New Department of Health and Human Services Guidelines suggest low, central, and high VSL estimates of $4.5 million, $9.6 million, and $14.6 million in 2016 dollars, respectively. Results suggest that Executive Branch authoritative bodies such as the Office of Management and Budget (OMB) would be well-served to update its guidance and best practices, using current or new methods, for choosing the appropriate value of a statistical life for agency regulatory purposes.

Results: Results of previous regulatory actions were examined with changing values of statistical life. These hypothesized changes in VSL allowed for a reexamination of the net benefits of previous food safety regulations.

Significance: The range and mean value of statistical life presented in regulatory impact analyses can play a significant role in the expected societal benefit, or burden, of a regulation.