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> In Western countries and other liberal democracies, estimates for the value of a statistical life typically range from US$1 million—US$10 million; for example

> In Western countries and other liberal democracies, estimates for the value of a statistical life typically range from US$1 million—US$10 million; for example, the United States FEMA estimated the value of a statistical life at US$7.5 million in 2020 Woah that's tiny.

lifestyleguru 3y ago
haha, already in rich EU countries it's much below EUR 100k - see e.g. Germanwings Flight 9525. In other countries it tends to zero. Even in US, I don't think that life of people awaiting visa amnesty is (statistically) worth more than zero. These claimed millions are weird numbers. "Life is priceless" is very dangerous notion to believe in, because it gives treacherous sense of security. In critical situations it might be "we are not spending more than EUR 3k to save his life and EUR 3k merely pays for 100km of transport and two paramedics".
- Gys 3y ago
  I assume there is a big difference between the value of life and the value of dead.
Semaphor 3y ago
> Note that the VSL [value of a statistical life] is very different from the value of an actual life. The part about the calculation the EPA uses is very relevant: > Suppose each person in a sample of 100,000 people were asked how much he or she would be willing to pay for a reduction in their individual risk of dying by 1 in 100,000, or 0.001%, over the next year. Since this reduction in risk would mean that we would expect one fewer death among the sample of 100,000 people over the next year on average, this is sometimes described as "one statistical life saved.” Now suppose that the average response to this hypothetical question was $100. Then the total dollar amount that the group would be willing to pay to save one statistical life in a year would be $100 per person × 100,000 people, or $10 million
- lifthrasiir 3y ago
  In the other words, there is a cost function `f(p)` which is the amount of money to spend in order to prevent the fatal risk of probability p. For low enough p this function can be linearly approximated, and we named the value of `f(1)` under this approximation as the value of statistical life only for convenience. (In reality `f(1)` or even `f(0.01)` is not defined, and the true value is mostly determined after the fact.)
ssl232 3y ago
The National Health Service in the UK maintain a value of life years, used to calculate whether to pay for the use of life extending drugs: https://www.bbc.co.uk/news/health-28983924 https://www.bbc.co.uk/news/health-28983924. It's quite low in the grand scheme of things; about £30-80k/year depending on the metric.
- iams 3y ago
  This is more of a negotiation tactic against pharmaceutical companies that are marketing new wonder drugs that give terminal cancer patients 1% longer life expectancy for 10x more cost. The drugs company can sell their new wonder drug to the UK for 80k a year, or not at all. That's why these drugs are so much cheaper in the UK than in countries such as the US.
  - robertlagrant 3y ago
    > That's why these drugs are so much cheaper in the UK than in countries such as the US. Well, sort of. The drugs come to us in the UK after the US customers have paid for the R&D. That's why they're cheaper; they're not being used to fund new drug discoveries.
    - s1artibartfast 3y ago
      Drugs dont come to the UK after R&D has been paid. UK/EU approvals times are often close to the US, but anticipated US revenue is what justifies the initial R&D spend. E.g. You are deciding if you will spend 1 Billion to develop a drug with a 20% sucess rate. Europe sales are projected at 2 Billion, and US sales at 10 Billion. It is US sales that make the expected value positive. If the US paid European rates, the product would not be developed.
      - robertlagrant 3y ago
        > Drugs dont come to the UK after R&D has been paid The R&D funding came from the previous drug, not the current drug.
michaelt 3y ago
A person who earns $57k/year working full time from age 18 to age 68 "only" makes $2.85 million over the course of their life. Obviously, a certain premium is appropriate, to reflect all the value that isn't reflected in salary, like raising children, caring for elderly parents, chores around the house, voluntary work and so on. And there's no amount of money that will make a person whole again after, say, the loss of their spouse. But if for statistical purposes we absolutely have to? I'd say $7.5 million sounds pretty generous.
- DeathArrow 3y ago
  How can the amount of money a person earns over his lifetime equal the value of his life? Are Musk, Bezos, Gates, Zuckerberg, Buffett 1 000 000 times more valuable than other persons?
  - simmerup 3y ago
    From the wikipedia article where this number is taken from: > Suppose each person in a sample of 100,000 people were asked how much he or she would be willing to pay for a reduction in their individual risk of dying by 1 in 100,000, or 0.001%, over the next year. Since this reduction in risk would mean that we would expect one fewer death among the sample of 100,000 people over the next year on average, this is sometimes described as "one statistical life saved.” Now suppose that the average response to this hypothetical question was $100. Then the total dollar amount that the group would be willing to pay to save one statistical life in a year would be $100 per person × 100,000 people, or $10 million. This is what is meant by the "value of a statistical life.”
  - michaelt 3y ago
    Did you notice the bit where I said it was right and just that the value not merely be the earnings, but more besides? As to Bezos and Gates, fortunately the statistical value of a life only has to concern itself with the median person, not with outliers.

lifestyleguru 3y ago

haha, already in rich EU countries it's much below EUR 100k - see e.g. Germanwings Flight 9525. In other countries it tends to zero. Even in US, I don't think that life of people awaiting visa amnesty is (statistically) worth more than zero. These claimed millions are weird numbers. "Life is priceless" is very dangerous notion to believe in, because it gives treacherous sense of security. In critical situations it might be "we are not spending more than EUR 3k to save his life and EUR 3k merely pays for 100km of transport and two paramedics".

Gys 3y ago
I assume there is a big difference between the value of life and the value of dead.

Semaphor 3y ago

> Note that the VSL [value of a statistical life] is very different from the value of an actual life. The part about the calculation the EPA uses is very relevant: > Suppose each person in a sample of 100,000 people were asked how much he or she would be willing to pay for a reduction in their individual risk of dying by 1 in 100,000, or 0.001%, over the next year. Since this reduction in risk would mean that we would expect one fewer death among the sample of 100,000 people over the next year on average, this is sometimes described as "one statistical life saved.” Now suppose that the average response to this hypothetical question was $100. Then the total dollar amount that the group would be willing to pay to save one statistical life in a year would be $100 per person × 100,000 people, or $10 million

lifthrasiir 3y ago
In the other words, there is a cost function `f(p)` which is the amount of money to spend in order to prevent the fatal risk of probability p. For low enough p this function can be linearly approximated, and we named the value of `f(1)` under this approximation as the value of statistical life only for convenience. (In reality `f(1)` or even `f(0.01)` is not defined, and the true value is mostly determined after the fact.)

ssl232 3y ago

The National Health Service in the UK maintain a value of life years, used to calculate whether to pay for the use of life extending drugs: https://www.bbc.co.uk/news/health-28983924 https://www.bbc.co.uk/news/health-28983924. It's quite low in the grand scheme of things; about £30-80k/year depending on the metric.

iams 3y ago
This is more of a negotiation tactic against pharmaceutical companies that are marketing new wonder drugs that give terminal cancer patients 1% longer life expectancy for 10x more cost. The drugs company can sell their new wonder drug to the UK for 80k a year, or not at all. That's why these drugs are so much cheaper in the UK than in countries such as the US.
- robertlagrant 3y ago
  > That's why these drugs are so much cheaper in the UK than in countries such as the US. Well, sort of. The drugs come to us in the UK after the US customers have paid for the R&D. That's why they're cheaper; they're not being used to fund new drug discoveries.
  - s1artibartfast 3y ago
    Drugs dont come to the UK after R&D has been paid. UK/EU approvals times are often close to the US, but anticipated US revenue is what justifies the initial R&D spend. E.g. You are deciding if you will spend 1 Billion to develop a drug with a 20% sucess rate. Europe sales are projected at 2 Billion, and US sales at 10 Billion. It is US sales that make the expected value positive. If the US paid European rates, the product would not be developed.
    - robertlagrant 3y ago
      > Drugs dont come to the UK after R&D has been paid The R&D funding came from the previous drug, not the current drug.

michaelt 3y ago

A person who earns $57k/year working full time from age 18 to age 68 "only" makes $2.85 million over the course of their life. Obviously, a certain premium is appropriate, to reflect all the value that isn't reflected in salary, like raising children, caring for elderly parents, chores around the house, voluntary work and so on. And there's no amount of money that will make a person whole again after, say, the loss of their spouse. But if for statistical purposes we absolutely have to? I'd say $7.5 million sounds pretty generous.

DeathArrow 3y ago
How can the amount of money a person earns over his lifetime equal the value of his life? Are Musk, Bezos, Gates, Zuckerberg, Buffett 1 000 000 times more valuable than other persons?
- simmerup 3y ago
  From the wikipedia article where this number is taken from: > Suppose each person in a sample of 100,000 people were asked how much he or she would be willing to pay for a reduction in their individual risk of dying by 1 in 100,000, or 0.001%, over the next year. Since this reduction in risk would mean that we would expect one fewer death among the sample of 100,000 people over the next year on average, this is sometimes described as "one statistical life saved.” Now suppose that the average response to this hypothetical question was $100. Then the total dollar amount that the group would be willing to pay to save one statistical life in a year would be $100 per person × 100,000 people, or $10 million. This is what is meant by the "value of a statistical life.”
- michaelt 3y ago
  Did you notice the bit where I said it was right and just that the value not merely be the earnings, but more besides? As to Bezos and Gates, fortunately the statistical value of a life only has to concern itself with the median person, not with outliers.