Center for Disease Dynamics, Economics & Policy

An important characteristic of many environmental programs is that their benefits extend far into the future. The primary purpose of cleanups at hazardous-waste disposal sites, for example, is often to prevent the contamination of groundwater that could pose risks to future residents at these sites. Such cleanups typically involve considerable capital and other costs, which are incurred at the front end of the project, and yield a stream of health benefits, often in the form of cancer cases avoided, that may not be recognized for many years. This would not pose unusual problems for program evaluation if everyone were comfortable with the assignment of dollar values to these reductions in future risk (see Cropper and Portney, 1990). However, regulatory agencies are sometimes reluctant to make such monetary valuations, preferring instead to evaluate programs on a cost-per-life-saved (CPLS) basis (Office of Management and Budget, 1991).