Where did you get $5,000,000, and what exactly does it represent?
I’ll think about this, though. You’re right in saying I’ve spent too much time thinking about the probability of success, and not enough on the value of success. I strongly suspect my $10 comes from some idea of what a reasonable monthly fee should be as an anchor, adjusted for the probability. As such, I should reconsider it.
Based on an extensive review of the research literature, the U.S. EPA (1997) suggests that a reasonable estimate of the VSL has a mean of $4.8 million with a confidence interval of plus or minus $3.2 million (in 1990 dollars. Note this is 8.2M +- 5.4M in 2010 dollars).
Where did you get $5,000,000, and what exactly does it represent?
I’ll think about this, though. You’re right in saying I’ve spent too much time thinking about the probability of success, and not enough on the value of success. I strongly suspect my $10 comes from some idea of what a reasonable monthly fee should be as an anchor, adjusted for the probability. As such, I should reconsider it.
So you should look up value of a statistical life
IIRC the figure is the average life insurance pay-out in the US. In the UK, it’s more like £1,000,000