Saturday, March 01, 2008
ECON 260: Comment Thread Question for Monday 3/3
Do you think it is necessary to place a value on human lives in order to make environmental policy decisions? If so, what do you think is the right way to determine the value of a life? If not, how would you suggest evaluating policies that have potential trade-offs between different sets of lives (that is, policy A might lead to the loss of some lives but the alternative policy B might also lead to the loss of some other lives)?
If one values human life, they will weigh the costs of human life in a cost-benefit analysis.
However, assigning a value of a statistical life by measuring risks of employment and times worked excludes the following ideas:
1) People who don't volunteer for the risk - they might have a higher WTA than measured
2) Social factors - benefits, income levels, position in society, and country of employment. These things change willingness to accept risk or extra wages.
3) Age - this measure essentially says that retired people have a much lower value of a statistical life.
Basically, this measure is limited and should incorporate other social factors into an individuals monetary worth.
Besides their work value, I think measuring the value of life (or cost of death) heavily depends on whose life it is, how they die and when they die.
A lot of the cost of people dying is in making other people upset or scared. If no one knows people are dying from water poisoning, no one gets upset! So a very public, gruesome death is more costly than a quiet one.
Here's an example for the importance of "when they die". Lving in a city and breathing in fumes and such may take 5-10 years of our lives. But whether we die at 75 instead of 85, we're still pretty old when we die, there is little work value in those last few years and few people will be very upset. But if children are dying at age ten (taking 60 years of life!) then thats a lot of work potential gone + makes people very upset.
These are questions that I do not feel comfortable answering.
So where does that leave me? In order for environmental policy to be made there has to be some measure for human lives and what they are worth. Is anyone else having trouble with this?
In my micro class someone did a report on the value of life; making the same argument that our book makes, that the value of life is their willingness to accept added danger based on wages. I asked whether people thought that since Iraq soldiers are paid less then American soldiers that they value life less and should therefore always be put in the front lines. Immediately everyone in the class took offense and said that you couldn't apply the value of life to that situation.
It is impossible to correctly determine the value of life. Like Amber said you have to take into account lots of variables, so many, and ones that are so large and complex that the use of creating a value of life becomes unhelpful. Life just isn't this rational.
Having said that, however, I have no idea what would be the best weigh value human life. I think Amber did a really nice job of bringing up some of the key issues with our current method and I cannot think of any real ways to compensate for those problems. Overall clearly one should look for policies that hurt the least number of people, but all bets are off when you have two groups of equal number.
Also in considering the value one gives to a human life, another issue I find intriguing relates to what Jasin said about the publicity of a human life – and the power and effect of media. The media often is able to intensify the public’s level of empathy to certain individuals, despite the distance factor just mentioned. It is interesting to think about how much money and valuation can be provided on finding one missing person/stranger in the wilderness versus the health of one's own child in the household of a regular smoker.
I also wonder about the use of VSL in making decisions when considering how yes, it could present two possibilities in terms of number and cost of lives, but in the end, after all these calculations, how much the decision is actually a choice made/not made by a certain individual/government in power. For example, if California or another state is individually going to ratify Kyoto or if a country such as Australia has recently declared ratification – what are those implications as for the VSL? Is the worth of the lives of these inhabitants now instantly changed even though residents may not have willingly accepted the policy?
One of the most dangerous jobs is fishing, which has a death rate 30 times higher than the rate of average workers (specifically high in New England). That's 118.4 deaths per 100,000 workers. Supposing that the typical (safe) job we might have at this point in our lives pays 10$ per hour, how much more would you need to be paid to be a fisherman? I'm curious specifically because college students tend to be exceptionally strapped for cash, and have a strong sense of invincibility. Perhaps you wouldn't need to be paid much more at all...
Can you calculate the value of a statistical life based on this number? Do you think that this survey style question is an accurate way of determining the value of a life?
I include the 2nd number because I think it is the most interesting. We put people to death who have generally committed more than one murder, so we have placed a minimum value on imposing "justice" for the loss of one person. It also gives us a pretty good idea of just how good we (or, mostly, the government) is at placing a value on human life -our soldiers, for instance, are worth less than the "justice" of putting someone to death. The range I've provided for a human life, moreover, is anywhere from $400k-7.2 million.
So what's the point of all this? I am hesitant to leave any one person or body or government the authority to enumerate the value of a human life. The reason we are in the mess we are in with global warming is because of poor calculations and government impotence.
What's the solution? Eclectic accountability and more responsible government spending. Is this possible? Probably not. But if the value of human life is infinite, then no amount of spending is too much to reach Pareto optimal, right?
The difficult question is comparative – how much are these lives worth when they are weighed not against industry profit, but against each other? How do we evaluate the costs and benefits of trade-offs between human well being in the Global North and the Global South? This poses a huge ethical dilemma. Unless you want to make the argument that one group of people is worth more than another (either inherently, which seems medieval, or in terms of life expectancy/wages, which there is obvious discomfort with), we have to assume that we all have equal value and equal rights to life. Considering this, when we evaluate policy, we must do it with a mind to the greater good—but do we do that in order to make a bigger pie for all potential pie eaters, or do we do that to alleviate the suffering of marginalized populations? This depends on the goal of the particular environmental policy.
The same god rules the notion of the value of a human life: the contribution of an Indian villager to national or international GDP is miniscule compared to that of a recent college graduate in America. Economics has no response to the discomfort we feel towards this, because money is the fair standard.
Like Kiel, I see this as revealing yet another flaw in our economic theory.
Maybe green capitalists are right, and capitalism can work truly fairly and justly once we "get the prices right". But how do you get the price right on a human being?
All that said, I'm still inclined to acquiesce to a monetized value of life, for lack of anything else. If we can't prioritize policy with some idea of the cost to human life, we can't make informed decisions. It's a given that in reality we care more about ours' and others' lives than a simplistic monetary amount. I don't think economics can or should account for a true measure of value - rather, it's a tool to prioritize and set policy.
Hence, when I think of this question, I cannot help but assimilate our lives to our fingerprints. Each one, in itself, is unique. No duplicate can be found amongst an individual, or another person in this world. If then, we are like our fingerprints, how can we even begin to monetize uniqueness? What would we have to compare to? And what would be our standard?
assuming that the people they're presenting the stuff to are human and have families and have some grasp of economics and the industry in question, shouldn't they be able to put their own value on life? would it be so bad if we just said, here are the costs we face and here are the lives that are at risk if we do nothing. this is the demographic that we're looking at, 60-70 year old immigrants or whatever. can't the people considering the problem come to their own decision on how much those lives are worth? why does it have to be one criterion? i think we should give ourselves a little credit. I mean i just hope that at least when monetary value is assigned to human lives, the real numbers and facts are also presented. i understand the text book is obviously dumbing it down and making it simple so we get it, too and these are just hypothetical examples that would in reality be much more studied. hopefully. i guess my point is we should leave it up to a large group of people to make their respective decisions based on their values and knowledge, rather than one unit of measurement making up the minds of everyone.
The problem I have with putting a value on human life is how relative the process is. Because of this relativity, I do not think that putting a monetary value in life is a good way to do a cost-benefit analysis. One way that could help resolve this issue is doing a cost-benefit analysis based on the number of human lives. More specifically, we could compare the # of lives that are "harmed" by the policy & compare that to the # of lives benefited. Though I do not think that this is the perfect way of conducting analysis, but I think it does a better job of decreasing the variability among different types of people.
I think the “right” way to determine the value of a life would be a time consuming and long process and that is not always possible due to time and money constraints. If one had all the time and money to research each individual affected by environmental policy decisions then a more accurate value could be placed on them depending on their contributions to society, family situation, salary, skills, ect. In my opinion, this would be the “right” way because it is looking at the individual subjectively, and not heartlessly objective.
And an Excerpt:
PERSON 1: "Human life is not a commodity. It cannot be traded against profits or exchanged for convenience. We have no right to decide that others should die to make us richer."
"But there are two problems with this indignant moral stance:
1. Moral indignation fails to recognize that valuation methods are not valuing individuals but are valuing changes in risk.
2. States and individuals make implicit trade-offs of life versus wealth/consumption/production all the time. Moral indignation arises when those trade-offs are made explicit."
Person 2 then goes on to say that it's not the economists who are putting a value on human life, it's the people; the economists are only using people's choices to see how much they value life.
To me, that seems to imply that we humans always know what we're getting into, and are completely rational people. When my friend jumps off a roof to experience the thrill of it, is that saying he's thinking rationally about the possibility of death or injury? Does he consider possible hospital costs? Maybe his parents are loaded so he figures he's safe. Maybe he's broke and figures any more debt is negligible. Maybe he doesn't think about consequences at all because that might stop him from jumping off the roof.
It seems to me that it is fallible to assume that common citizens are fully informed rational thinkers. Perhaps the economists that want to place a value on my life are, but to say that we (the citizens) are making those decisions for them is silly. The economists are basing their "human life" numbers on decisions that are being made with varying and usually non-economic mindsets. That being said, if it is essential to place a value on human life for their calculations, I couldn't think of a better way to do it.
The correct value of human life is hard. In the most cold sense it would be what they contribute to society and how much that person makes, but being an environmentalist and having an interest in social justice, I believe that this is not an appropriate way of determining the value of any human. Humans are just as important to the earth as any other specie, and each person is worth a lot. How to determine this, however, seems to be impossible. I would like to say that human life is priceless, but everyone knows this is not true. Maybe an appropriate way of determining this is the value that each person puts on their own life, but that would be a very hard calculation to make. I really don't have a solution to this, but I feel important, at least to myself.
I think Amber did a great job in explaining the other factors that we need to consider.
Also, I don’t know of this “veil of ignorance” but the concept of future productivity seems very interesting and something to be looked into when valuing a life. The problem we are struggling with is then, how do we more accurately define this value so as to encompass the entire importance and worth of human life? Is there even a way to standardize such an assessment?
When choosing between two policies that result in a negative net loss of lives quantity and equity should be the main considerations.
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