Final answer:
The Value of a Statistical Life (VSL) is an economic tool used to estimate the monetary value of life-saving measures based on what people are willing to pay to reduce their risk of death in higher-risk jobs. It's not a valuation of individual lives, but a way to make decisions on safety versus cost. The EPA uses VSL to weigh the benefits of environmental regulations against their costs.
Step-by-step explanation:
Describing Value of a Statistical Life (VSL) in simple terms involves explaining how economists assign a monetary value to the risks that people are willing to take for certain jobs that have a higher probability of fatal incidents. This does not mean putting a price tag on a human life in a moral or ethical way, but rather, it's a tool that helps policymakers and businesses make informed decisions about safety measures and regulations. For instance, a job in the ocean fishery may have a higher risk of death compared to fish farming, consequently offering higher wages to compensate for that risk. Similarly, ice trucking in Alaska poses more dangers than truck driving in less hazardous areas, leading to higher pay for ice truckers to acknowledge the increased risk.
In essence, VSL is used by organizations such as the U.S. Environmental Protection Agency (EPA) to evaluate the cost-effectiveness of regulations that affect public safety. The concept is by no means meant to commodify human life but to ensure a balance between economic costs and the value of increased safety.