Your Life Is Worth $10M, According to the Government [video](npr.org)
npr.org
Your Life Is Worth $10M, According to the Government [video]
https://www.npr.org/sections/money/2020/07/17/870483369/your-life-is-worth-10-million-according-to-the-government
25 comments
“Invaluable” assets are a thing, and usually valued at “1” of the most commonly used unit of currency (“1 dollar”, not “1 cent”).
I'd love to see someone do an analysis of how much each state is (implicitly) valuing a statistical life in the COVID19 age. For example, given state A which opens quickly, and state B which opened much more cautiously, it seems that A is valuing lives at a lesser amount, while B is valuing each life more. I guess this could be tricky to tease out of the data, yet it seems like it could be fun problem for an economist and a statistician to team up on
You'd have to work out the human cost linked to the cost of economic losses from lockdown, though. Unemployment increases death rate and shortens lifespan. I'd love to see somebody do this too, but it's a mountain of work.
Another factor to consider is that nobody knows the future. Let's say I invest $10m in a scheme that I expect to save 10 lives. Alas, the guy I gave the money to chose to spend it all in Vegas then jump off a tall building. If you look at outcomes alone I spent $10m for -1 lives. Does this mean I value lives at -$10m?
Applying this to coronavirus response, it is more likely that the fast-opening states have convinced themselves that the infection rate can be kept under control, and it will cost them less in terms of both lives and money to open sooner. Whether they're right or not is another matter entirely, but people lose their life savings betting on the stock market all the time.
Another factor to consider is that nobody knows the future. Let's say I invest $10m in a scheme that I expect to save 10 lives. Alas, the guy I gave the money to chose to spend it all in Vegas then jump off a tall building. If you look at outcomes alone I spent $10m for -1 lives. Does this mean I value lives at -$10m?
Applying this to coronavirus response, it is more likely that the fast-opening states have convinced themselves that the infection rate can be kept under control, and it will cost them less in terms of both lives and money to open sooner. Whether they're right or not is another matter entirely, but people lose their life savings betting on the stock market all the time.
> Applying this to coronavirus response, it is more likely that the fast-opening states have convinced themselves that the infection rate can be kept under control, and it will cost them less in terms of both lives and money to open sooner.
Yes, I agree. See https://www.npr.org/2020/04/06/828345390/pandemic-onomics-le...
Yes, I agree. See https://www.npr.org/2020/04/06/828345390/pandemic-onomics-le...
I agree that this would be an interesting problem, except that it assumes the response a reasoned trade-off. We are observing the handful of leaders who decided to kill grandma for money winding up with a worse economic situation than the leaders that who sensibly. Certainly this was based on a callous disregard for people's lives, but it might not look that way in the recovery data since they didn't get what they paid for.
If you want to pretend the likes of Bolsonaro and Trump and Lukashenko are behaving reasonably, that would mean they are putting a negative value on human life. I doubt even the modern wave of authoritarians are quite that bad.
If you want to pretend the likes of Bolsonaro and Trump and Lukashenko are behaving reasonably, that would mean they are putting a negative value on human life. I doubt even the modern wave of authoritarians are quite that bad.
I dunno, if you would prefer that all your political opponents would drop dead, and your political opponents number > 50% of the population, then you do indeed put a negative net value on human life.
That makes some huge assumptions about COVID Response, as well as the cost of lockdown which is non-zero value in both lives and money.
Other factors such as weather, mask wearing, prohibitions on large gathering vs total lock down, nursing home response, orders that moved people to nursing homes, and about 100 other factors
This implication of "open states are killing people" is a false narrative and not based on any actual data
Other factors such as weather, mask wearing, prohibitions on large gathering vs total lock down, nursing home response, orders that moved people to nursing homes, and about 100 other factors
This implication of "open states are killing people" is a false narrative and not based on any actual data
> This implication of "open states are killing people" is a false narrative and not based on any actual data
My understanding from the following paper is that opening too soon does indeed both kill people and also depresses the economy. See also the title of the paper: "Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu"
https://static1.squarespace.com/static/58f6b1c3e6f2e1a8b58d5...
My understanding from the following paper is that opening too soon does indeed both kill people and also depresses the economy. See also the title of the paper: "Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu"
https://static1.squarespace.com/static/58f6b1c3e6f2e1a8b58d5...
Did you even read that report before using it to refute my statement? Or did you just read the title?
Nothing in this refutes what I said and many things support it. For example they highlight that NPI's are often meaningless because people will naturally avoid some things given the virus risk, this is their justification for saying that NPI do not cause economic harm because even if there were not government mandates then people would have naturally not participated in the economy anyway.
If this is the case then why the need for the lock-downs? it is circular reasoning at its finest.
Further they are talking about the effects of social distancing, mask wearing, and public gathering bans not total economic lockdown like is being imposed in many regions.
As I said in the original comment I support the idea of limiting or eliminating public gatherings, mask wearing, etc.
What I have problem with is the selective picking of which retailers can be open, and which can not, which businesses are "essential" and which are not. All businesses are essential to the employees, owners, and customers that depend on them, and it should be up to those individuals to determine if they are properly manage the risk (i.e enforce mask wearing, sanitation, social distancing, curb side pickup, etc) or if they need to close.
The government response in many regions is pure authoritarianism and an over reaction.
The study also points out some GLARING differences and limitation between COVID and 1918, a few of them are
1. COVID19 has a much lower mortality rate then 1918 flu for prime age workers
2. They acknowledge that NPI's where far less draconian in 1918 in most regions than many governments response to COVID was, this likely increased the economic impact of NPI's in those regions
3. The closure of schools in 1918 had FAR less economic impact in 1918 due the much lower female labor participation
4. Their study of economic conditions leading up to 1918 is incomplete as the data set is not there
5. WWI .... that is a pretty big impact.
So no I do not find this paper to be a compelling report on how the response to covid depressed economic activity vs COVID itself, also in no way does this paper support the conclusion that "opening too soon does indeed kill people " as it is absent any analysis on if banning public indoor gatherings + mask wearing is just as effective (or more effective) than the complete closure of "non-essential" businesses
It also has no analysis on other items such as population density, weather, mass transit, and about 100 other factors of virus spread
Nothing in this refutes what I said and many things support it. For example they highlight that NPI's are often meaningless because people will naturally avoid some things given the virus risk, this is their justification for saying that NPI do not cause economic harm because even if there were not government mandates then people would have naturally not participated in the economy anyway.
If this is the case then why the need for the lock-downs? it is circular reasoning at its finest.
Further they are talking about the effects of social distancing, mask wearing, and public gathering bans not total economic lockdown like is being imposed in many regions.
As I said in the original comment I support the idea of limiting or eliminating public gatherings, mask wearing, etc.
What I have problem with is the selective picking of which retailers can be open, and which can not, which businesses are "essential" and which are not. All businesses are essential to the employees, owners, and customers that depend on them, and it should be up to those individuals to determine if they are properly manage the risk (i.e enforce mask wearing, sanitation, social distancing, curb side pickup, etc) or if they need to close.
The government response in many regions is pure authoritarianism and an over reaction.
The study also points out some GLARING differences and limitation between COVID and 1918, a few of them are
1. COVID19 has a much lower mortality rate then 1918 flu for prime age workers
2. They acknowledge that NPI's where far less draconian in 1918 in most regions than many governments response to COVID was, this likely increased the economic impact of NPI's in those regions
3. The closure of schools in 1918 had FAR less economic impact in 1918 due the much lower female labor participation
4. Their study of economic conditions leading up to 1918 is incomplete as the data set is not there
5. WWI .... that is a pretty big impact.
So no I do not find this paper to be a compelling report on how the response to covid depressed economic activity vs COVID itself, also in no way does this paper support the conclusion that "opening too soon does indeed kill people " as it is absent any analysis on if banning public indoor gatherings + mask wearing is just as effective (or more effective) than the complete closure of "non-essential" businesses
It also has no analysis on other items such as population density, weather, mass transit, and about 100 other factors of virus spread
This is a subtle fallacy of equivocation. Payment incurred after a loss is not the same thing as worth. Human life is invaluable, but that doesn't mean we can pay infinite money for restitution. Even if we could, monetary (quantitative) compensation could never replace the qualitative value life has to you, your loves ones, etc.
Except that we make choices daily on that. We choose to have alcohol for pleasure in exchange for health, we get on an airplane to travel the world at the risk of a plane crash, etc.
We constantly trade life for money.
The problem is not in the sophistication of a method to value human life, its just a tool for analysis. The problem is the utilitarians eager to decide who lives and who dies, something very present in the current pandemic.
The problem is not in the sophistication of a method to value human life, its just a tool for analysis. The problem is the utilitarians eager to decide who lives and who dies, something very present in the current pandemic.
Seems high
$10M may be the monetary value used for these type of calculations, but when you look at our country's yearly budgets, it's clear that each live is valued much lower than $10M. Especially after seeing our response to Covid-19.
The government thinks $10M per life is about the right number on the margin given US's economic situation and the slack they have in the annual budget. Obviously if there's a nuclear war tomorrow, or something else that drastically changes either the money supply or the number of people who need saving, the exchange rate would be different.
Realistically I think the value should be a lot lower, considering there are many interventions you could do that saves more than 1 life per $10M, even if we confine calculations to the US. (World-wide the marginal cost of a life is probably less than $10k). Of course you have to also take into consideration what is politically and organizationally feasible, so perhaps $10M is the government's marginal cost of a life considering its set of permissible policies.
...Or maybe somebody just pulled a number out of a hat to justify an expensive piece of legislation in the 80's, and nobody's bothered to update the number since.
Realistically I think the value should be a lot lower, considering there are many interventions you could do that saves more than 1 life per $10M, even if we confine calculations to the US. (World-wide the marginal cost of a life is probably less than $10k). Of course you have to also take into consideration what is politically and organizationally feasible, so perhaps $10M is the government's marginal cost of a life considering its set of permissible policies.
...Or maybe somebody just pulled a number out of a hat to justify an expensive piece of legislation in the 80's, and nobody's bothered to update the number since.
This is the thing - it’s likely the exact value for a human life varies dramatically depending on the context.
That’s because they’re not usually attempting to assign a value to human lives in any abstract sense.
That’s because they’re not usually attempting to assign a value to human lives in any abstract sense.
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This is really great!
A couple of anachronisms:
the Macbook inside the robot (!!!)
the TI calculator (that one looks to me like it's from the 1990s)
the mojibake on the printouts (looks pretty Unicodeish to me)
Can you spot any others?
P.S. an explanation of the importance of doing this according to HPMOR:
> Every time you spend money in order to save a life with some probability, you establish a lower bound on the monetary value of a life. Every time you refuse to spend money to save a life with some probability, you establish an upper bound on the monetary value of life. If your upper bounds and lower bounds are inconsistent, it means you could move money from one place to another, and save more lives at the same cost. So if you want to use a bounded amount of money to save as many lives as possible, your choices must be consistent with some monetary value assigned to a human life; if not then you could reshuffle the same money and do better. How very sad, how very hollow the indignation, of those who refuse to say that money and life can ever be compared, when all they're doing is forbidding the strategy that saves the most people, for the sake of pretentious moral grandstanding...
https://www.hpmor.com/chapter/82
The video seems to agree -- doing the calculation allowed OSHA to justify the regulation, in part because there are still other safety regulations that wouldn't be justified under the same method (it's not a blank check for OSHA to impose every safety regulation it can ever think of). (The cost-benefit robot saying that it now understands the value of human life might sound ironic, but it didn't understand how to account for them before the calculation and it did after the calculation, so, kinda?)
A couple of anachronisms:
the Macbook inside the robot (!!!)
the TI calculator (that one looks to me like it's from the 1990s)
the mojibake on the printouts (looks pretty Unicodeish to me)
Can you spot any others?
P.S. an explanation of the importance of doing this according to HPMOR:
> Every time you spend money in order to save a life with some probability, you establish a lower bound on the monetary value of a life. Every time you refuse to spend money to save a life with some probability, you establish an upper bound on the monetary value of life. If your upper bounds and lower bounds are inconsistent, it means you could move money from one place to another, and save more lives at the same cost. So if you want to use a bounded amount of money to save as many lives as possible, your choices must be consistent with some monetary value assigned to a human life; if not then you could reshuffle the same money and do better. How very sad, how very hollow the indignation, of those who refuse to say that money and life can ever be compared, when all they're doing is forbidding the strategy that saves the most people, for the sake of pretentious moral grandstanding...
https://www.hpmor.com/chapter/82
The video seems to agree -- doing the calculation allowed OSHA to justify the regulation, in part because there are still other safety regulations that wouldn't be justified under the same method (it's not a blank check for OSHA to impose every safety regulation it can ever think of). (The cost-benefit robot saying that it now understands the value of human life might sound ironic, but it didn't understand how to account for them before the calculation and it did after the calculation, so, kinda?)
"If you refuse to put a value on life, the value that will be inserted into the spreadsheet concerning the value of life is 0."