Think about the VSL criteria – a low and predictable risk spread across a population and can tell how much they will spend to mitigate that risk. «Most calculations of statistical life refer to a life or a small number,» says Andrew Atkeson, an economist at UCLA who works on VSL and the pandemic. But they`re harder to enforce, he says, when the risk is high and the exposed population is huge — potentially anyone. And the cost side isn`t a small part of a paycheck or a tiny bit of extra annual salary. «It`s not just, `Oh, I have to postpone buying a new car for a year,` or `I can`t get fine food for my birthday,`» Banzhaf says. «We`re talking about entire lifestyles and livelihoods that are ruined and don`t come back.» Reopening the economy requires thinking about the trade-off between life and money. Government agencies are already accustomed to valuing human life in dollars when reviewing safety rules. It`s a strangely philosophical work, somehow bizarre and elegiac one. «It`s a treacherous subject, and I have to choose a non-descriptive title to avoid initial misunderstandings,» Schelling begins. «It is not the value of human life that I will discuss, but the value of `saving lives`, of preventing death.» Schelling tried to get out of the moral weight, to give a monetary value to life, and after 35 sides of wriggling, he identifies the lever that will move the crowd. You can`t value a life, he says, but you can determine how much money people are willing to accept to risk theirs. But we value life risks – we pay for safety devices, we charge more for hazardous work.
Thus, the value of a statistical life is technically a measure of the value of risk and allows you to compare the cost of regulation in dollars to the benefits in lives that can be saved. Attaching value to human life has become a key project in tort law reform. The perceived medical malpractice crisis has drawn attention to the exorbitant damages present in some malpractice (and bodily injury) lawsuits. The total cost of these lawsuits has weighed heavily on the legal system and has caused some negative waves elsewhere (such as liability premiums). Parliament has tended to limit the costs of actions for damages by reforming the tort system; The most important way to achieve this seems to be the introduction of damage control. The acceptance of a finite value of human life is inherent in the legal notion of limitation of damage. According to the law in most states, there is a fixed amount of money that no suffering exceeds. Sounds a bit Orwellian, doesn`t it? GONZALEZ: Kip says people are constantly putting a monetary value on their own lives based on the work they do. How risky they are and how much money they are willing to accept in wages for these risky jobs. «Risky» refers to jobs where there is a risk of death, such as construction workers or foreign correspondents. In many countries, equivalent parameters are used, with the value assigned varying considerably. [2] MALONE: Seeing how worth saving a life was part of Betsey`s job when she worked in the federal government during the Obama administration.
GONZALEZ: It`s a statistical life, not a real life? The following estimates were applied to the value of life. Estimates refer either to one year of additional lifespan or to the statistical value of a single lifetime. In Sweden, the value of a statistical life has been estimated at SEK 98 million (EUR 0.9 to EUR 10.6 million). [27] Such a plan would likely save lives and cost lost work days due to injuries. But it could cost companies millions. Was it a good idea? The answer came down to how to assess the lives that could be saved. One agency, the Occupational Safety and Health Administration, felt it was worth it. The other, the Bureau of Management and Budget, does not. GONZALEZ: So the government has to do that calculation, and to do that, they have to say that a life lost is worth a lot of money. And until the 80s, here`s how they did it. They asked, what is the cost of death? Just the death of the average person, both the medical expenses associated with that death and – and this is the important part – their loss of income.
The following is an adaptation of Friedman`s new book, «Ultimate Price: The Value We Place on Life,» about how economists and data scientists evaluate human lives and some of the limitations of their methods. «We spend money to smooth a curve on a highway and predict that it will reduce the likelihood that every person who bypasses that curve will die,» Banzhaf says. «If there are millions of people driving this curve, and everyone has a reduced risk of dying on this one in a million curve, then we have saved a life by correcting the curve.» If you believe in VSL, it`s worth spending $10 million to rehabilitate the road. When we talk about the value of a human life, we usually say that it is priceless. Because it is. But at the same time, economists are, in a sense, putting a dollar sign on life. And so does the government. In fact, so many regulations are being evaluated – and weighing the costs to businesses with the benefits for life. That`s how the U.S. government got to this point. STEVENSON: And what would it even mean to think that people have infinite value? We would use all our resources to save a person? People would not make that decision. The RANDies were not alone in tackling the moral and economic problem of the value of a human life.
In the middle of the century, economists and lawyers sought to rationalize and establish statistical frameworks for this fundamental problem of the human condition: managing risks and determining what outcomes are worth a possible death. The courts have done so, for example, to compensate people for unlawful killings. As part of the benefit-cost analysis, the team measured each dollar value of an environmental benefit by estimating how many dollars a person is willing to pay to reduce or eliminate a current threat to their health, also known as «willingness to pay» (WTP). The VDP of the U.S. population was estimated and tabulated for various categories such as mortality, chronic bronchitis, high blood pressure, IQ changes, and stroke. Thus, the individual WTPs were summed to obtain the value of a statistical lifetime (VS) for each category considered in the assessment of the benefits of the legislation. [14] Each assessment in Figure 1 is the result of several studies that have compiled and averaged both WTP information collected from individuals and estimated WTP estimates based on the risk compensation required in the current labour market to find a unique HRV.