The Government’s Valuation of Military Life-saving in War:

A COST MINIMIZATION APPROACH By CHRIS ROHLFS A wide range of costly government policies are designed to extend citizens’ lives and to reduce the risk of premature death. Using economic reasoning, one can evaluate such policies on the basis of efficiency. Life-saving policies pass a cost-benefit test if and only if their costs fall below the beneficiaries’ willingness-to-pay for the reduced fatality risk (W. Kip Viscusi, 1993). Some government agencies have now adopted this standard for evaluating the cost-effectiveness of various life-saving policies (Viscusi, 1993; Jim Holt, 2004). One important case of government tradeoffs between dollars and fatalities is military procurement of armored vehicles. Troop-intensive units, while relatively inexpensive, place large numbers of soldiers’ lives at risk. By replacing some troop-intensive units with tankintensive units, an army can achieve the same level of mission accomplishment as it did before, but with fewer fatalities. Doing so, however, requires that the government make costly capital purchases. Military policymakers have known about the usefulness of armored vehicles in reducing fatalities since their initial use in World War I (J.F.C. Fuller, 1928; B.H. Liddell Hart, 1925). This issue also motivates contemporary discussions regarding vehicle procurement in Iraq (Lisa Hoffman, 2004; Melinda Liu, et al, 2004; PR Newswire, 2004). These discussions, however, include little mention of the dollar value of such policies’ benefits. In Chris Rohlfs (2005a), I estimate the value of soldiers’ lives that was implied by the government’s use of troops and tanks in World War II. The data used in the analysis describe 164 land battles fought between American and German forces on the Western Front. These data