Talk:Value of life
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POV post that I wrote on K5 that I think might have some ideas to put into this article:
First of all resources are not unlimited. Say someone developed a wonderful new drug that gave everyone who took it 5 more years of life. The catch, producing this drug cost one billion dollars per person who took it. Should everyone get this drug? Well, the cost would greatly exceed the ability of most individuals to pay for it and all governments (at least if the government is paying for everyone). The other problem with this miracle drug is that it is more expensive than other ways to save a comparable number of years of life. So it would be foolish to spend the money on the miracle drug. What cost benefit analysis can do is give a dollars per life saved. Then, if your goal is to save the most lives you start with the cheapest and keep going until you run out of money. Any other method of selecting projects to pay money on will result in fewer lives saved.
For example, say you have a one million dollar budget for saving lives. You can either put in 10 traffic lights that will save 10 lives total over their lifetime, or you can put in one arsenic filter in the city water supply that will save 1 life by preventing cancer. Unless you think that traffic deaths are particulary nice and cancer deaths are 10 times as bad, the best plan would be to put in the traffic lights and not the arsenic filter, because you save 9 more lives.
Going further, you can look at a country and see where the country stops paying for methods of saving lives. In the United States, this is generally around six million dollars per life saved. In India, this is closer to one hundred thousand dollars per life saved. Does this mean life is cheaper in India? Not really, it just means that India is poorer than the United States, so the budget for saving lives runs out sooner. Would it be more intellegent for India to increase the amount that the government spends on saving lives? No, because pretty soon you end up doing irrational things like taking money that would be spent on say food, to pay for say, a new traffic light, and then you end up killing more people that way. So, in short, different countries will have different dividing lines on where to stop spending money to save lives.
So, lets say that you want to do a cost benefit analysis to decide on one government program to save lives. Do you need to compare this program to every other government program to see if it has a higher dollars per life saved than any of the others it might displace? Nope, you just look up in a table that the government has and you see that the value per life saved is five million dollars. Then you calculate the cost of the program and the number of lives saved and divide. If it greater than five million than the program is not worth it at the present time. If it is less then five million per life then it is worth it at the present time. Then you report back accordingly.
If you think it is immoral to do it that way, then please propose a better solution for determining which programs are beneficial and which are not. You will likely propose something that ends up killing more people than the `immoral' method of comparing lives saved to dollars spent (or for that matter, comparing lives saved to a fixed amount that has been carefully determined).
Of course, there are some things that economics has a very hard time trying to determine a dollar value for. A big one is existance value, i.e. how much should we spend just to make sure that something exists (like how valuable is it to you that there exist whales in the ocean). A good cost benefit analysis should give details on how every item that is not monetary in nature has been converted to money. Then, if you have a different opionion, you can come along and recalculate using your own method of valuation. Economists have spent quite a bit of time trying to deal with these questions. Those who do not understand economics generally reinvent it poorly.
I think parts of it might be useful for this article. Possibly as a new section on why economists use a dollar value sometimes. Jrincayc 17:50, 12 Mar 2004 (UTC)
Is there any list of "entries the world does not need"? Get-back-world-respect 12:53, 30 Mar 2004 (UTC)
I agree with the first poster alot of stuff but his believe in the absoluteness of cost benfit analysis (CBA) is entirely unfounded. You cannot value a human life in monetary terms it is absolutly wrong from an economic and ethical stand point. No amount of money is useful to you when your dead (admitly alturism comes into it but thats another point entirely) so if your going to die you might as well give up everything you have for some time alive (assuming your life is worth living in your opinion.) Ethicaly monetrising an irreverisble action is unsound. If the giant panda dies out you can calculate the cost that it infilcits on society in lost happiness. However the panda is never coming back its value is hence the value to future generations is unknown, so this has to be taken into account.
As for the assertion that there is nothing better than CBA analysis, what about risk-risk analysis? This is where the risk of performing the task is balanced against the lowering of risk that would happen if the task was carried out. Based on this alot of regulations are unsound as they cause amny more deaths than they would otherwise save.
things that possibly should be included are basic stuff like the fact that your not talking about lives in most of these things but extremely small probabilities for many individual people. These probabilities have to be lower than (according the british hse 1 in 10000).
Talk about value of statistical life instead of value of life and the different methods: human capital, willingness to pay and valuing life in life years. Discussion of how this effect stuff and the valuation.
Something about round the world, as the discussion does vary Britian and the USA realy start CBA and valuing lifes but how its developed might be appropriate bit might turn the entire entryy into one big long essay.
Something on discounting not being so easy with human lifes defintily and that for most the manner of death matters (eu double the value of life in the case of cancer).
[edit] Abortion
I think the abortion paragraph is not NPOV. To me, it comes out clearly on the "right to choose" side. In fact, why even bring it up, except under the point of view that there should be a right to choose? Why not say that it's a market failure that there's no market value for the right to shoot your noisy neighbors? I would have a hard time making the paragraph NPOV. Furthermore, I'm not at all convinced that the paragraph adds that much insight to the Value of Life topic. So, I'm deleting it. Derekt75 02:22, 3 August 2006 (UTC)
[edit] Value of a Statistical Life
Public policy analysts often use a concept called the value of a statistical life (VSL) in cost benefit analysis.
The point of this value is simple. Suppose a new policy is being consider that will save an average of 100 lives per year. Supose the population is one million. So the policy will save one life out of every 10,000 people. Now supose the policy will cost $50 million to implement, or equivalent to $50 per capita. Is this a good policy or a bad policy? That depends on whether the average person is willing to spend $50 to reduce their chance of death by one in 10,000. If the average person thinks that is a good investment, then they'd be willing to have their taxes go up to pay for the new policy. If the average person thinks the cost is not worth the benefits, then it is a bad policy. Putting this another way, the policy will cost $50 million and will save 100 lives. So each life saved will cost approximately half a million dollars. Is spending half a million dollars, per life saved, a good investment? Does society as a whole, think that this is a worthwile use of tax dollars?
Rather than have to conduct a survey every time the government wants to implement a new policy to see if people think the costs outweigh the benefits or not, economists have developed a measure called the value of statistical life (VSL) which measure the break even point at which society as a whole is willing to pay in order to reduce the statistical risk of death. This way, policy makers can figure out how much a policy will cost, for each life that is saved, and compare this with the VSL. For example, if VSL is estimated to by $4 million, then it means a policy which costs less than $4 million for each saved life, produces net social benefits, while a policy that would cost more than $4 million for each life saved represents a net social loss. Society would have been better off (on average) spending that money some other way.
VSL can be estimated by asking people their willingess to pay for marginal reductions in their chance of death. For example: "would you be willing to pay $10 per month for a new drug that would reduce your chance of having a fatal heart attack by one in 2000?" Responses are then averaged across society. Alternatively, it can be estimated by looking at the day to day decisions people make in their lives, that indicate a willingness to trade increased personal risk for money. Eg, do people work a job that is more dangerous because it pays better? or do people spend more money on the car with a higher safety rating?
In either case, the VSL is based on the AVERAGE willingness of citizens to pay for marginal safety improvements. It is in no way based on the "cost" to government of saving lives. It is not, as stated in the article "the cost of reducing the (average) number of deaths by one". In fact, it is the exact opposite. It is the BENEFIT of reducing the average number of deaths by one.
The article also makes statements like "it is also necessary to put a precise economic value on a given life". This is not what VSL is about at all. VSL is not about saying "Fred Smith's life is worth exactly $3,215,789" VSL is a measurement that realy only has meaning when applied to aggregate policy impacts. Not on a person by person basis. It used in cost benefit analysis to assess the benefits of saving lives. Policy makers may know that a given policy will save about 100 lives per year. But they have no way of knowing which 100 people those lives will be. Hence, they want a measure of the average value (benefit) of saving a life. The value of one specific life(the value Fred's life compared to Bill's life) is not relevant.
The "value of life" that is discussed in the accompanying artilce has nothing to do with VSL. A large number of economist (most/all economists?) would generaly favour a VSL approach to measuring/defining the value of life, rather than the approach taken in the article. From a social welfare analysis perspective, VSL or a similar willingness to pay measurement are certainly more valid for use in a cost-benefit analysis then the measure discussed in this article.
The way the article currently stands, it implies that the standard economic approach to measuring the value of life is to simply see how much it costs to save a life. This is definetly not the case. I think the article should be overhauled.
Failing that, a new article on VSL should be created, and this one should be linked to it.
As far as I could tell, there currently is no article on VSL.
P.S. In cost benefit analysis, economists often use measures of the Value of a Life Year (VOLY), a Quality Adjusted Life Year (QALY), or similar measure. These concepts are distinct from a VSL, but are quite similar. The position of the article is equally inconsistent with a VOLY or QALY approach to measuring the value of life.
Northern Bear 12:13, 1 March 2007 (UTC)
