Most people, if asked how much money their life was worth, would say that is it priceless. But what about how much money people would pay to reduce their risk of dying by a certain, small amount? How much, for example, would you pay to make it 0.00001 percent less likely that you will die today? A quid? A million pounds? Somewhere in between?
Some economists think we can make better decisions about how we should balance increasing costs and increasing safety by calculating how much a group of people would collectively pay to save a ‘statistical life’ (which means reduce the number of them likely to die by one).
The UK Department of Transport (DoT) did this, and came up with a value of life of £1.6 million. They use this to figure out how much to spend making Britain’s roads, rails and transport safer.
Before they used this method, agencies like the DoT would figure out how much to spend via something called ‘gross output’. Gross output calculates how much a lost life costs society by looking just at what that person would have produced and consumed if they’d lived. That could lead to valuations people found immoral - like suggesting retired people aren’t worth a lot (because they consume government money through pensions but don’t produce any work).
And gross output also failed to take into account some of the main reasons we have for wanting to saves as many human lives as possible: things like ‘it causes grief and suffering for the people who loved them’ or ‘we are all individuals who contribute something just by existing’. That meant gross output figures were always much lower than value of life figures.
Some people still aren’t convinced that the value of life model is useful. For lots of us, trying to find an exact amount of money we’d pay to reduce a risk is hard. Several value of life studies have been thrown out because people got confused and gave answers that make no sense (like saying they’d pay more to prevent a minor injury than death). And of course, some say that any attempt to ‘price’ life is just fundamentally problematic.