The "Cost" of a life

[Flames in 07]

The discussion in the transfer payments thread got me to thinking about something else.

The allocation of resources from west to east make no sense from an economist perspective ... and speaking of an economist perspective I've always wondered if an economist had ever calculated the cost of a human life.

People say human life is priceless, but daily decisions by every person prove that not to be true. Economics is interesting to me because it gives a very unique way to observe human behavior and decision making ... and extrapolates interesting meaning.

IE I went to the flames game tonight ... I didn't have to, but I wanted to.

I understood full well that I had to drive to the game, and there was a small risk that through the transport I could have been injured or killed. I just prooved that my life isn't priceless. I took a small gamble so I could enjoy myself tonight.

I had a friend of mine die when I was in Gr 8 in a skiing accident, but that didn't stop me from skiing in the future. People do dangerous jobs for larger pay etc etc.

Since it is not priceless, it must have a price. I wonder if someone has ever done a study to try and caluclate the price people put on human lives simply by observing their behavior.

[BlackArcher101]

Sure they have. It's called Life Insurance. There is a price for everything.

[Flames in 07]

No life insurance is math around the probability of loss of life. That's different.

[BlackArcher101]

Then I don't see what you are getting at. Life Insurance can still take into effect your importance to your job and other things.

[Vulcan]

In law, it's a sliding scale. If you commit a murder as a juvenile, it's worth four years in jail. If you're an adult, it may be life in prison.

[Flames in 07]

I know, but life insurance is simply about the odds of a certain person who smokes or not smokes dies.

What I'm saying is ... put it this way. Let's say someone offers you the safest job on earth and it pays 25k / yr ... and this is your best risk free job you can find. Then someone offers you a job on one of those crab boats off the alaskian coast. You do some homework and figure out that in any given season you have a 1 in 200 chance that you will die. And the guy offers you 50k / yr. You say no. Then he counters, OK 75 per year. Well, in that case you said that your life was worth more than the risk for an extra 25 k per year so it's worth at least:

25k * 200 = $5,000,000


but you'd do it for the extra 50k (given the odds of the job that you will survive 99.5% of the time) you have said that your life is worth less than $10,000,000

[Wookie]

Originally Posted by Flames in 07

I know, but life insurance is simply about the odds of a certain person who smokes or not smokes dies.

What I'm saying is ... put it this way. Let's say someone offers you the safest job on earth and it pays 25k / yr ... and this is your best risk free job you can find. Then someone offers you a job on one of those crab boats off the alaskian coast. You do some homework and figure out that in any given season you have a 1 in 200 chance that you will die. And the guy offers you 50k / yr. You say no. Then he counters, OK 75 per year. Well, in that case you said that your life was worth more than the risk for an extra 25 k per year so it's worth at least:

25k * 200 = $5,000,000


but you'd do it for the extra 50k (given the odds of the job that you will survive 99.5% of the time) you have said that your life is worth less than $10,000,000

But you're going to die anyway.

As well what's the 0 value?

You can't do nothing and thus live forever!

you could have this "safest job ever" and your coworker turns out to be a nut and shoots everyone at work.

[gottabekd]

I seem to recall an artical saying the average human life was worth about $2 million. Can't remember what very scientific methods they used to come up with that though.

[icarus]

In rejecting so-called "wrongful life" claims in tort, Canadian and Australian (and probably other) authorities have considered it a forensic impossibility to determine the value of a life with a disability as compared to no life at all.

[blayn]

In one of my civil engineering lectures my prof mentioned that the government uses a certain figure ( i think it was either 1.5 or 2 million) to decide if a project gets the go ahead. aka if the project will save one life and cost less than that figure, it gets the go ahead. If it costs more than that and is estimated to only save one life over its lifetime, it doesnt.

[llama64]

Don't most people consider 'life' priceless? Or is that just hallmark sentiment...

Not sure how it's related but I do know that the cost to replace a human worker at the average employer (professional) is around $10k.

I suppose you could take the per capita figure for Canada and figure out using some sort of investment equation the exact value of each Canadian, on average.

But I'm pretty sure that all I'm worth is a stale candy bar and a day old slurpee.

[Hakan]

Policy analysts usually determine the cost of a life in the 2 to 5 million dollar range. They measure this by looking at people's willingness to pay for live saving consumables and divide that by the probability that of losing a life without that consumable.

For instance, if an airbag costs 200 bucks and the chances of you being in a fatal car accident is 0.0001 then your life would be worth $2,000,000.

All very much simplified of course.

[nieuwy-89]

Originally Posted by blayn

In one of my civil engineering lectures my prof mentioned that the government uses a certain figure ( i think it was either 1.5 or 2 million) to decide if a project gets the go ahead. aka if the project will save one life and cost less than that figure, it gets the go ahead. If it costs more than that and is estimated to only save one life over its lifetime, it doesnt.

I've done a few cost-benefit scenarios in my job and yes, we typically use about $1 million. However, this is from a civil engineering perspective. I'm sure the legal and insurance professions would have a different take.

[kingGOGO]

cost of a life depends on how you see life

[I-Hate-Hulse]

The FAA uses a cost of $2.7 million USD for a human life. That is, if the cost of a "Fix" for a plane's defect exceeds $2.7M per person estimated to be saved by fixing the defect, it's deemed too expensive, and the fix is not made mandatory....

http://fast.faa.gov/Riskmgmt/Secrisk...cs/00-11-a.doc

[mykalberta]

Originally Posted by Flames in 07

The discussion in the transfer payments thread got me to thinking about something else.

The allocation of resources from west to east make no sense from an economist perspective ... and speaking of an economist perspective I've always wondered if an economist had ever calculated the cost of a human life.

People say human life is priceless, but daily decisions by every person prove that not to be true. Economics is interesting to me because it gives a very unique way to observe human behavior and decision making ... and extrapolates interesting meaning.

IE I went to the flames game tonight ... I didn't have to, but I wanted to.

I understood full well that I had to drive to the game, and there was a small risk that through the transport I could have been injured or killed. I just prooved that my life isn't priceless. I took a small gamble so I could enjoy myself tonight.

I had a friend of mine die when I was in Gr 8 in a skiing accident, but that didn't stop me from skiing in the future. People do dangerous jobs for larger pay etc etc.

Since it is not priceless, it must have a price. I wonder if someone has ever done a study to try and caluclate the price people put on human lives simply by observing their behavior.

There used to be transfers east to west so eventually it balances out.

Unless you are willing to leave Canada, there is no point in complaining about transfer payments, they are a way of life north of the 49th.

MYK