The Conversible Economist's Timothy Taylor pointed us to the EPA's FAQ page, which has an in-depth section devoted to calculating how much, for insurance purposes, a human life is worth.

Actual retail price? $7.4 million, in 2006 dollars.

Here's the agency's explanation — basically, it's how much you'd be willing to pay to lower the odds that smog will kill you:

"The EPA does not place a dollar value on individual lives. Rather, when conducting a benefit-cost analysis of new environmental policies, the Agency uses estimates of how much people are willing to pay for small reductions in their risks of dying from adverse health conditions that may be caused by environmental pollution.

They even provide a handy example:

"Suppose each person in a sample of 100,000 people were asked how much he or she would be willing to pay for a reduction in their individual risk of dying of 1 in 100,000, or 0.001%, over the next year. Since this reduction in risk would mean that we would expect one fewer death among the sample of 100,000 people over the next year on average, this is sometimes described as "one statistical life saved.” Now suppose that the average response to this hypothetical question was $100. Then the total dollar amount that the group would be willing to pay to save one statistical life in a year would be $100 per person × 100,000 people, or $10 million. This is what is meant by the "value of a statistical life.” Importantly, this is not an estimate of how much money any single individual or group would be willing to pay to prevent the certain death of any particular person."

Makes sense.

(Via Alexandre Delaigue)