What Is One Life Worth?

Jan. 13, 2009— -- It's easy to put a price tag on a home, or a job or an investment. But what is the value of a human life?

One man had to answer that question for thousands of victims of the Sept. 11 attacks. As the head of the U.S. government's Victims' Compensation Fund, Kenneth Feinberg had to place a dollar value on each and every life lost.

"In this system of civil justice in our country, for 200 years and more, we have always put a price on life," Feinberg told ABC News' John Stossel. "Juries every day in New York, every village and hamlet in this country, listen to the evidence and then place a value on an injury, on a death. It is the American way of compensating victims."

But after 9/11, to avoid that civil justice system, Congress created a $7 billion fund to help victims' families and limit lawsuits.

"Congress felt that right after 9/11, there would be such national trauma associated with more lawsuits filed against the airlines, they became …convinced by the airlines, we'd better come up with a creative, statutory alternative and the 9/11 fund was that alternative," Feinberg said.

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The payments, he says, were based on "fair, consistent and transparent calculations."

"What would the victim have earned over a lifetime but for 9/11? How many dependents were left? Did the victim have a spouse? How much life insurance or other collateral income was received by the surviving family as a result of 9/11?"

In his book "What Is Life Worth," Feinberg explained the mathematical formula he used and how it worked. Take a single man, age 35, earning about $250,000 a year. He's worth $2.6 million. Add a wife? His worth increases to $4.2 million. Kids -- how about four -- now he's worth $4.6. There was a fixed amount, however, for pain and suffering: $250,000.

Not everyone was happy with the formula, which Feinberg says he understands.

"You're putting numbers on people who died or were horribly disfigured. It is a difficult assignment," he said. "I did the best I could."

Charles Wolf's wife of 12 years was killed on 9/11. Katherine Wolf worked on the 97th floor of the north tower of the World Trade Center, and after her death Wolf became an instant critic of Feinberg and the fund, creating a protest group called Fix the Fund.