Community versus market values of life.

Author:Cooter, Robert
Position:II. Community Damages and the Community Value of Life C. Social Norms as Ideal Behavior (and Guidepost for Damages
 
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  1. Social Norms as Ideal Behavior (and Guidepost for Damages)

    The preceding Section made an important distinction between individual precautionary behavior and social norm-guided behavior. The Section also made a distinction between descriptive norms and prescriptive (or injunctive) social norms. Here, we elaborate on these distinctions and discuss why certain types of social norms--injunctive norms--are uniquely worthy of serving as the basis for tort damage calculations. In short, the deliberative, collective, and iterative process by which injunctive social norms are formed (and re-formed) makes them a desirable touchstone for damage estimation. Injunctive social norms reflect collective attitudes about public safety that are aspirational or idealized. Contrarily, individual market behavior often reflects self-interest and idiosyncratic preferences about risk, rather than community values. Individual market behavior concerning risk is also more susceptible to bias and error than injunctive social norms.

    Much of the VSL literature derives values of life by looking at wage premiums for risky jobs. (79) For example, assume job A pays $30,000 and entails a 1/100,000 risk of death, while job B pays $30,100 and entails a 1/50,000 chance of death; the jobs are otherwise identical. The market pays workers a wage premium of $100 to accept an additional 1/100,000 risk of death. In this case, the implied VSL is $10 million. In other words, accepting $100 to assume an extra 1/100,000 chance of death, or foregoing the same amount to avoid it, implies a VSL of $10 million. (80) However, such job choices are mostly matters of individual preferences and economic constraints, rather than community norms. Because one's choice of a job--at least in terms of its riskiness--is not typically governed by social norms, the VSL implied by wage premium studies is a market value rather than a community value. (81) We discuss the regulatory use of labor market studies, and their various shortcomings, in Part III.

    The social norms considered in this Article, and the only type on which community VSLs should plausibly be based, are injunctive social norms. As mentioned in Part II.B, injunctive social norms prescribe actions that communities consider to be ideal, and they are behaviors that communities are willing to enforce through costly social sanctions. Such norms generally concern what people ought to do, not what they actually or regularly do. Social norms, in short, concern approved or disapproved behavior rather than average behavior. The objective signs of social approval and disapproval are, among others, praise, blame, inclusion, exclusion, partiality, esteem, and contempt.

    As collective commitments, injunctive norms must be continually explained and justified in communal discourse. By shifting the terms of the discussion from individual strategy to public welfare and morality, social norms protect communities against the folly of irresponsible people (or responsible people who lapse into irresponsibility). They also protect communities from rules that benefit one community subgroup at the expense of others:

    Social norms evolve through a process of discussion, which often exposes evolutionary traps. Evolutionary traps often occur because the best strategy for each individual benefits him less than it harms other players.... [A] community will not develop social norms supporting strategies that harm its members. Once exposed, a strategy leading to an evolutionary trap may be censured by a community, or tolerated, but not encouraged. In other words, a consensus will not arise in the community that its member ought to follow a strategy leading to an evolutionary trap. (82) The collective nature of norms has other benefits as well. Because norms require some level of collective agreement, individual errors in reasoning will often impact the resulting rule less than individual decision making. (83) Even if the community is not especially intelligent or technically sophisticated, the mere fact that they are a group can make their collective wisdom more dependable. This information dynamic resembles the price-setting abilities of a market: partial information from many people results in a better rule than any individual could make, just as efficient markets combine the costs and benefits of many individuals into a better price than any individual could set. Reinforcing this process--and also the market metaphor--is the fact that norms constantly compete with each other for people's allegiance. When a superior alternative presents itself, the community can revise or abandon existing norms. (84)

    Much of our argument relies on the notion that injunctive social norms--as collective agreements about ideal behavior---are meaningful measures of the values that communities implicitly place on life and limb. Although we believe that social norms of precaution often reflect considered judgments about safety, social norms are not perfect: they may be outdated, based on incorrect information, or tainted by self-interested community subgroups. Fortunately, norms can--and do--improve: most notably through the competitive process noted above. Interestingly, the use of community VSLs in tort may also aid in the refinement of norms. Relying on norms in court can serve to change them by exposing the public to the implicit values of life contained in the norms. Most people do not know the implicit values of life and limb associated with their behavior, or with social norms. Using norms as a basis for damages would publicize these implicit values, or "revealed" collective preferences about safety. If damages seem too high, communities may decide that more risk is acceptable, either generally or in specific contexts. This adjustment process may also make social norms of precaution more consistent in the way that they value life and limb.

    To illustrate the distinction between injunctive norms and descriptive behavioral norms, consider the case of driving speeds. Most people drive over the speed limit on some occasions, and many may flagrantly violate the limit on rare occasions. In a sense, then, driving the speed limit is not the average behavior, the average would include the flagrant speeding. Communities, however, would not likely enforce a norm that allowed flagrant speeding. Though individuals may sometimes "free ride" on the speeding norm--capturing the benefits of others' reduced speeds and avoiding the costs of driving slowly themselves--norm-violators' individual actions cannot change an injunctive norm.

    Because nontrivial or flagrant violations of speed limits invite social scorn, "roughly obey the speed limit" counts as an injunctive community norm. The health/wealth tradeoffs reflected in this norm therefore generate community VSLs. Three of the studies represented in Table 3 thus rely on VSLs derived from speed limits. (85)

    Another three of the community VSL studies in Table 3 rely on social norms governing seat belt use. (86) The seat belt studies yield community values of life because the use of seat belts is governed by social norms. Though seat belt use has not always been prevalent, (87) 87 most people now bristle at the sight of a beltless driver, and many would be moved to say something to pressure the person to "buckle up"--especially in the case of children. Further, there are numerous awareness campaigns about the dangers of driving without seat belts, some of which portray seat belt use as "normal" or "cool," and others which suggest that failure to use a seat belt is "stupid." (88) The essence of social norms is the willingness of community members to exert (costly) informal pressure on potential violators. The fact that people who have no financial interest in the use or sale of seat belts will expend effort to enforce their use implies the presence of an injunctive social norm. For similar reasons, the other studies represented in Table 3--which infer VSLs from the cost and risk reduction associated with the use of bicycle helmets, child car seats, and smoke alarms (89)--count as community VSLs. (90)

    As the above examples demonstrate, community norms and legal rules often govern the same activities. When these norms and rules overlap, individuals are doubly pressured to conform. In the case of seat belts, for example, drivers face an expected fine when they choose not to buckle up, and they also face the possibility of social sanctions and guilt. Double enforcement raises the compliance rate, especially in cases of imperfect legal enforcement. (91) It is worthwhile to note that, in such cases, the existence of the law does not undermine the value of the related social norm as a guide to the value of life. Though legal rules arise from legislative bargains rather than communal deliberation, communities make the choice in certain cases to "adopt" a law and engage in costly enforcement measures to ensure compliance. That communities are willing to enforce certain legal rules, and not others, suggests that social norms embody some approval of the underlying risk/health tradeoffs in the laws. (92) In short, social norms that piggyback on, or overlap substantively with, legal rules appear to be more than generic inducements to follow the law, regardless of its content.

    1. Community Norms, Social Welfare, and Norm-Efficiency

    The preceding Section discussed reasons why prescriptive community norms might plausibly increase social welfare: the collective wisdom of groups, the deliberative aspect of norm creation, the competition from alternative norms, and the educational aspect inherent in the use of community VSLs. (93) A related, and much debated, question is whether social norms are efficient. More specifically: do social norms encourage economically efficient behavior, and does the answer to the efficiency question determine their appropriateness as a guidepost for damage awards?

    From a strict economic perspective...

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