There are a lot of conversations right now that seem to pit economics against life and health. There is debate over the trade-offs of reopening the economy, for example, and over hazard pay for essential workers. But the messy mix of balancing human costs with economic costs did not start and end with the coronavirus crisis.
Statistician and health economist Howard Steven Friedman told “Marketplace” host Kai Ryssdal that price tags on human lives are all around us.
“It happens in civil courts, for-profit companies and, in fact, regulatory agencies use values of life as part of their regular work,” he said.
The following is an adaptation from Friedman’s new book, “Ultimate Price: The Value We Place on Life” about how economists and data scientists value human lives and some of the limitations of their methods.
How much is a human life worth?
The question’s complexity resides in the fact that how we arrive at a price tag on human life says a great deal about our priorities. The price tags, and the methods used to develop them, are a reflection of our values as a society. They are infused with influences from economics, ethics, religion, human rights, and law.
Ideally, there would be a simple answer of how to value a human life that most people could agree on. Yet there is no such answer.
The philosopher Isaiah Berlin stated that humans have a “deep and incurable metaphysical need” to search for timeless truth that does not exist. Instead, we need to accept that there are many competing truths and a “plurality of values.” The task of valuing life has many competing truths and no simple answer. Readers may find it frustrating that we cannot summarize with one key bullet point or a single take-home message about how human life is valued, but topics as complicated as this often cannot be boiled down to one pithy solution that satisfies nearly all interested parties.
Valuing some lives more than others seems logical and natural to many of us. Given the choice of saving the life of a convicted serial murderer or the life of a heroic police officer, most would choose to save the police officer. On a more personal level, empathy drives us to value the lives of those closest to us more than the lives of those we do not know. If you had to choose between saving the life of a stranger or the life of your child, wouldn’t you save your child?
For others, valuing all lives the same has some intuitive logic. It is a simple answer. It resonates with many people’s stated perspective, and it is in line with the perspective that if life must be valued, then no one should receive preferential treatment.
This notion of valuing lives equally is not a throwback to an idealistic, egalitarian philosophy but rather one that resonates among many people. Consider billionaires Mark Zuckerberg and his wife, Priscilla Chan. Their open letter to their newborn daughter stated, “We believe all lives have equal value, and that includes the many more people who will live in future generations than live today.”
This sentiment is mirrored in the philosophy of the Bill & Melinda Gates Foundation: “We see equal value in all lives.” Valuing all lives the same is counter-intuitive to many. After all, it equates the saints with the sinners, Nobel Prize winners with homeless heroin addicts, the inventor of a lifesaving vaccine with a mass murderer.
Some take the philosophical perspective that human life is priceless. Individuals who take this stance conclude that the question of how much a human life is worth is meaningless or unanswerable. However intellectually satisfying, this perspective ignores the reality that human life is constantly being monetized and that this should therefore be done in an equitable way.
Price tags are being continuously placed on our lives. If we care about equity, we need to ensure that the science behind these estimates is not oversold and that fairness is always a consideration when cost-benefit analysis is performed.Howard Steven Friedman
In my book, “Ultimate Price: The Value We Place on Life,” I take the pragmatic approach of focusing on the real-world methods of how life is valued and the implications and limitations of these methods. The prices depend on who is doing the valuation, the methods they are using, the purpose for the valuation, and quite often, whose life is being valued.
Many excellent economists have tackled the daunting task of putting a price tag on life. These economists view this as a necessary exercise to generate key inputs for cost-benefit analyses. This attempt at monetizing life flies in the face of those who maintain that life is priceless and cannot be valued. Economists must make assumptions, and while the math underneath their estimates may sometimes be complex, the key assumptions built into these estimates are straightforward and, unfortunately, riddled with limitations and often flaws.
Methods that rely on surveys that pose hypothetical questions with little basis in reality will always produce questionable results. For example, surveying people on how much money would they need to be paid to accept a 1% increase in the chances of dying of lung cancer will result in broad range of answers.
The fact that these surveys are given to an unrepresentative sample of the population adds more issues. The additional step of excluding responses that do not fit within the bounds of what has been predefined as acceptable compounds those flaws. Clearly, these methods are highly suspect both theoretically and practically. But they exist and are being used to develop key inputs that influence decision-making in our lives. Unlike philosophical debates, these methods and their outcomes can be readily examined and statistically adjusted to produce different, potentially fairer, outcomes.
To diminish the issues with these surveys, the sample biases should be corrected to reflect the broader population, restrictions should not be placed on responses, and an extremely large value should be used to represent the opinion of those who say the value of life is priceless.
Methods that rely on people’s real-world decisions seem to have a stronger basis in reflecting how society actually values life, yet these methods also have major theoretical and practical issues. They examine how much more someone requires to be paid in order to work a risky job or how much one is willing to spend on safety measures that reduce the risks of their mortality. These methods assume that people are aware of the implications of their decisions and that they have other options. The inferred Value of a Statistical Life is biased because the subjects often lack options, the leverage needed to negotiate, or the knowledge of the risks involved.
With all these limitations on how to estimate the value of life, we are left with a limited number of choices. Price tags are being continuously placed on our lives. If we care about equity, we need to ensure that the science behind these estimates is not oversold and that fairness is always a consideration when cost-benefit analysis is performed.
We need to insist that whatever price tag is used to value life is high enough to sufficiently protect human life. We need to insist that inequitable wage gaps, such as racial and gender pay gaps, be eliminated since they impact valuations of life. We need to insist that when income is used in valuing life, steps must be taken to ensure that the lives of the poorest, the retired, the unemployed, and those volunteering their time are protected and not left susceptible to the whims of governments, organizations, and corporations.
No situation should exist where a court determines that someone’s death does not merit damages since their death “saved money.” No situation should exist where the death of one billionaire is deemed to be worth more than the deaths of a hundred people who earned much less. No situation should exist where a company unnecessarily risks people’s lives to save a few dollars. No situation should exist where unequal valuing of human life leads to the denial of basic human rights.
All lives are precious, but they are not priceless. Rather, they are priced all the time. Often the price tags are unfair. We need to ensure that when lives are priced, that they are priced fairly so that human rights and human lives are always protected.
Adapted excerpt from “Ultimate Price: The Value We Place on Life” by Howard Steven Friedman (University of California Press, May 5, 2020).
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?