CPSC Withdraws Final Guidance on Value per Statistical Life

Content

ACTION:

Notice of withdrawal.

SUMMARY:

The U.S. Consumer Product Safety Commission (Commission or CPSC) is withdrawing its Final Guidance for Estimating Value per Statistical Life, published in the
Federal Register
on April 18, 2024. After further review, the Commission has determined that the methodology assigning a Value per Statistical
Life (VSL) for individuals under 18 years of age at twice the VSL for adults creates significant legal, analytical, and policy
issues. These issues include misalignment with prevailing federal guidance of VSL, methodological deficiencies in the supporting
evidence, heightened litigation risk, and the appearance of improperly inflating benefits in order to support desired regulatory
outcomes. The Commission is returning to its prior VSL methodology, which is consistent with methodologies used by other federal
agencies, and committing to a process that is empirically supported, analytically rigorous, legally defensible, and publicly
credible.

DATES:

The Final Guidance for Estimating Value per Statistical Life, published April 18, 2024 at 89 FR 27740, is withdrawn as of February 24, 2026.

FOR FURTHER INFORMATION CONTACT:

Rohit Khanna, Acting Associate Executive Director, Directorate for Economic Analysis, U.S. Consumer Product Safety Commission,
5 Research Place, Rockville, MD 20850; telephone: 301-987-2508; email: rkhanna@cpsc.gov.

SUPPLEMENTARY INFORMATION:

I. Background

The Value per Statistical Life is a widely used parameter in benefit-cost analysis, including regulatory analysis, that represents
an individual's willingness to pay for a small reduction of their risk of fatality. On April 18, 2024, the Commission issued
a notice of availability announcing the issuance of Final Guidance for CPSC's application of the VSL in the agency's analyses
of benefits and costs and in particular for its regulatory analysis. 89 FR 27740-01, Notice of Availability of Final Guidance for Estimating Value per Statistical Life (NOA). The Final Guidance attempted to standardize the application of VSL in the Commission's regulatory benefit-cost analyses,
specifying among other provisions that, for purposes of sensitivity analysis, the VSL for individuals under the age of 18
would be set at twice the adult VSL (the “double-VSL-for-minors” methodology).

Following publication of draft guidance on March 24, 2023 (88 FR 17826), stakeholders had raised substantial concerns regarding
the empirical basis for the double-VSL-for-minors methodology, its legal sustainability, and policy implications. (1) These concerns were echoed in public comments, including from commenters who supported the concept, (2) and in economic literature surveying more than 60 VSL studies across multiple countries.

II. Basis for Withdrawal

Upon further review, the Commission has determined that the double-VSL-for-minors methodology is inconsistent with the VSL
methodologies adopted by other government agencies, is based on a handful of stated-preference studies that provide only a
slim empirical foundation for adopting such a novel approach, establishes arbitrary age cut-offs without sufficient justification
or empirical support, and would impose unnecessary legal risk for any CPSC rulemakings that relied upon the novel methodology.

1. Inconsistency With Other Federal Agencies

In the notice of availability announcing the issuance of the Final Guidance, the Commission noted that that the double-VSL-for-minors
methodology “differs from other established VSL guidance,” and that “[o]ther government economists have applied a uniform
VSL to all fatalities that fall within the scope of the regulation being assessed.” 89 FR 27740. (3) The Commission acknowledged that this approach “has the advantage of simplicity.” Id.

The notice of availability noted that the Office of Management and Budget (OMB) and other executive branch agencies and departments
have published guidelines on the application of VSL; the VSL parameters set forth in these guidelines are concentrated substantially
below the $26 million VSL (for minors) established in CPSC's Final Guidance. (4) However, the Commission asserted that “CPSC, as an independent agency, is not subject to these guidelines.” 89 FR 27740.

The Commission finds that this view is inconsistent with Article II of the U.S. Constitution that vests all executive power
in the President and charges that he or she faithfully execute the laws. 5 Moreover, even aside from whether the Commission is subject to guidelines provided by OMB and other executive branch agencies
and departments, the justification offered in the notice of availability for the Commission establishing its own novel standard
did not sufficiently account for the benefits of consistent application of principles across the whole of government. Continuing
to apply the novel VSL methodology described in the Final Guidance is inconsistent with recent executive orders to restore
accountability of regulatory agencies to the American people and promote the unified and coherent execution of Federal law. (6) Therefore, the Commission finds that the Final Guidance improperly deviates from this long-standing interagency best practice
without sufficient justification or compelling evidence to justify the departure.

2. Insufficient Empirical Basis

In comments provided in response to the publication of draft guidance, one commenter noted that the available evidence with
respect to children is quite sparse, particularly when compared to the large volume of literature on VSL more generally, that
the Commission based the VSL guidance on a review of only five stated preference articles that were based on four surveys,
and that even if reliable, the studies “constitute a very slim empirical foundation for a major shift in benefit assessment
practices.” (7) Another commenter, a co-author of the report and journal article on which the Commission relied, noted that the number of
studies that provide comparable estimates of the value of fatal risk reductions for adults and children remains relatively
small and the validity of those results is unclear in many cases. (8) The commenter stated that the magnitude of any difference between children and adults and the extent to which it varies by
age of the child are both uncertain due to limitations in the available research, and that more research is needed to support
adjustment factors that could be used in the primary results. (9)

The Commission finds that the available empirical evidence is insufficient to support adoption of a novel double-VSL-for-minors
methodology. The underlying Industrial Economics (2018) report, which informed the work on the 2024 VSL Guidance, relied on only four stated-preference studies—several by
the same authors—involving disparate, non-representative populations, such as parents in Milan, Italy, and Orlando, Florida,
half of which were outside of the U.S. (10) As one commenter noted, assessments of VSL vary greatly by country and the age-related differences in the relative value of
risks to children may vary as well. (11) The Industrial Economics (2018) report itself acknowledged that some observed differentials between adult and child VSL are not statistically significant, meaning that those studies could not rule out that observed differences were the result of random chance. None of the cited
studies examined product safety contexts or injury types relevant to CPSC's jurisdiction. Rather, they involved illness deaths
due to cancer, respiratory disease and foodborne illness.

3. Arbitrary Age Cut-Off

The Commission also finds that the Final Guidance is not sufficiently clear and specific and creates an arbitrary “cliff”
or “cutoff” at age 18. First, the Final Guidance does not define the specific age cutoff for “child” versus “adult,” despite
significant variation in relevant statutory and regulatory definitions (e.g., Consumer Product Safety Act uses age 12; ASTM F963 uses under 14; legal adulthood for purposes of voting eligibility is 18;
the standard drinking age is 21). Without a clear definition, the methodology is arbitrary and impedes reproducibility. Second,
as commenters noted, the double-VSL-for-minors methodology creates an arbitrary “cliff” in which the value associated with
small changes in risk to a person's life decreases in half the day they turn 18. (12) Such a cliff is without empirical support or logic.

Even if a higher VSL for minors were empirically justified, applying the identical multiplier to all minors of any age—infants,
toddlers, pre-teens, and adolescents—disregards material differences in life expectancy and risk valuation within this diverse
population. A commenter noted that the reviews upon which CPSC based the double-VSL-for-minors methodology acknowledge that
the extent with which the ratio of child-to-adult values varies depending on the age of the child is uncertain, and that it
seems unrealistic to assume that values do not change as a child grows from birth to age 18. (13)

Finally, meta-analyses of labor, product, and housing market data indicate median U.S. VSL values of approximately $7 million, (14) with variation driven largely by income, risk type, and labor market characteristics—not age alone. The literature provides
only limited and inconclusive support for a systematic doubling of VSL for minors.

At the other end of the age spectrum, the Commission finds that the “normative framework” adopted in the Final Guidance could
result in the Commission inadvertently de-prioritizing regulations intended to protect the lives of senior citizens—another
group whose needs Congress specifically mandated the Commission consider. (15)

4. Heightened Litigation Risk

The Commission finds that the double-VSL-for-minors methodology imposes unnecessary risk for CPSC rulemakings that rely upon
the novel methodology. Courts have recently vacated CPSC rules where deficiencies in benefit-cost methodology undermined the
rule's legal foundation, such as in Window Covering Manufacturers Association v. CPSC, No. 22-1300 (D.C. Cir. 2023) (“. . . the number of arithmetic mistakes undermines the Commission's analysis and suggests that
greater care is warranted on remand”). Introducing a novel and controversial multiplier without robust empirical support increases
the likelihood of judicial

  invalidation, with the attendant loss of consumer protections. Moreover, applying a flat multiplier to all individuals under
  a certain age introduces the appearance that the agency is artificially exaggerating the regulatory benefits of a policy,
  potentially biasing policy decisions toward over-regulation and distorting resource allocation. As noted in the economic literature,
  such inflation can undermine the credibility and defensibility of benefit-cost analyses. [(16)]()

The Commission notes that the methodology the CPSC uses to calculate benefits of a proposed regulatory action is a distinct
issue from the policy considerations that may animate the agency's choice of regulatory priorities. As one commenter noted,
CPSC may pursue and prioritize policies that differ from what is implied purely by the results of benefit-cost analysis based
on other policy considerations like the particular effects on certain vulnerable sub-population. The Commission notes its
ability to pay special attention to specific subpopulations, including children, without the double-VSL-for-minors methodology.
In specific instances, Congress has waived the cost-benefit analysis requirement altogether to facilitate rulemaking. Most
recently, Congress waived these requirements in Reese's Law (Pub. L. 117-171), and it did so categorically in Sections 104
and 106 of the Consumer Product Safety Improvement Act of 2008 (Pub. L. 110-314). Where CPSC is required by law to conduct
a cost-benefit analysis, it should accurately reflect the costs and benefits of proposed regulations. The Commission should
not attempt to conceal those policy considerations by placing a thumb on the benefit-cost scale in favor of its preferred
policy. Manipulating data, assigning arbitrary costs and benefits, or otherwise gaming the process to ensure a particular
outcome places agency rules at significant risk and undermines public trust in the institution.

III. Effect of Withdrawal

Withdrawal of the VSL Guidance reinstates the Commission's prior practice of relying on a single VSL estimate applicable to
all age groups, adjusted for inflation, and other relevant economic factors, thus improving consistency with prevailing federal
methodologies and OMB guidance (the latter of which CPSC is now subject to per E.O. 14215).

Alberta E. Mills, Secretary, Consumer Product Safety Commission. [FR Doc. 2026-03655 Filed 2-23-26; 8:45 am] BILLING CODE 6355-01-P

Footnotes

(1) See, e.g., W. Kip Viscusi, Vanderbilt U. Law Sch., Comment on Proposed Draft Guidance for Estimating Value per Statistical Life (May
25, 2023), https://www.regulations.gov/comment/CPSC-2023-0013-0007 (“There is no sound rationale for CPSC's proposed approach.”)

(2) See, e.g., Lisa Robinson, Ctr. For Health Decision Sci. & Ctr. For Risk Analysis, Harvard T.H. Chan Sch. Of Pub. Health, Comments on
Proposed Draft Guidance for Estimating Value per Statistical Life (May 23, 2023), https://www.regulations.gov/comment/CPSC-2023-0013-0006 (“For children, CPSC proposes to double the adult VSL estimates as part of its primary results, based on the findings of Industrial
Economics (2018) and Robinson et al. (2019). However, both documents indicate that this ratio is uncertain due to the limitations
of the available research.”).

(3) See also Thomas J. Kniesner and W. Kip Viscusi, “Is a Child's Life Twice as Valuable as an Adult's?” Regulation, Summer 2023 (referenced
in Comment ID CPSC-2023-0013-0007) (hereinafter, Kniesner & Viscusi) (“government agencies do not make distinctions related
to differences in the VSL by age, but instead treat mortality risks symmetrically”).

(4) For example, in OMB's Circular A-4, the VSL range's upper bound is $10 million (in 2001 dollars, or roughly $16 million in
2023 dollars).

(5) U.S. Const. art II, § 1, cl. 1; U.S. Const. art II, § 2, cl. 5.

(6) Exec. Order No. 14215, 90 FR 10447 (Feb. 24, 2025).

(7) Kniesner & Viscusi, supra note 3.

(8) Comment from Lisa Robinson, supra note 2.

(9) Id.

(10) Kniesner & Viscusi, supra note 3.

(11) Id.

(12) See, e.g., Comment from Lisa Robinson, supra note 2 (“[T]he CPSC approach assumes that the value of reducing mortality risks immediately drops substantially as an individual
reaches age 18. . . . [I]t seems unrealistic to assume that values . . . suddenly halve on the child's 18th birthday, then
remain constant until the end of life.”); see also id. (“it is unclear why CPSC has rejected alternative, more commonly used approaches that . . . avoid the `cliff' created by assuming
a sharp decrease in values as an individual turns 18”).

(13) Id.

(14) W. Kip Viscusi & Joseph E. Aldy, The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World,
Nat'l Bureau of Economic Research, Working Paper 9487, available at www.nber.org/papers/w9487.

(15) Section 9(e) of the CPSA, 15 U.S.C. 2058(e) (“In the promulgation of such a rule the Commission shall also consider and take
into account the special needs of elderly and handicapped persons to determine the extent to which such persons may be adversely
affected by such rule .”); see also Kniesner & Viscusi, supra (“The Final Guidance suggested that the potential for using a lower VSL for seniors is an active area of research. . . . Adopting
a lower VSL for senior citizens, it will once again use out-of-the-mainstream practices for regulatory analysis. Ever since
the outcry that resulted when the Environmental Protection Agency used a “senior discount” to value mortality risks for people
over age 65 in its 2003 analysis of the Clear Skies initiative, government agencies have steered clear of devaluing the lives
of senior citizens.”).

(16) Kniesner & Viscusi, supra note 3 (“Doubling the VSL for children boosts the apparent attractiveness of the regulation. . . .”); see also id. (“[T]he CPSC may advocate whatever VSL multiple is needed to create the illusion of a desirable policy in order to make undesirable
regulations appear to be worthwhile.”); see also id. (“Any future efforts to improve the mortality risk calculations for government regulations affecting children or other demographic
groups should be based on solid empirical evidence rather than an attempt to justify regulations that would not otherwise
pass muster based on economic efficiency considerations.”).

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