What's happening at the
Tuesday 22 Aug 2017 | 13:41 | SYDNEY
Tuesday 22 Aug 2017 | 13:41 | SYDNEY

The economic value of life

By


This post is part of the Globalisation and war debate thread. To read other posts in this debate, click here.

COMMENTS

1 June 2010 11:26


This post is part of the Globalisation and war debate thread. To read other posts in this debate, click here.

With regard to Sam and Hugh's exchange: in strictly monetary terms, we do value life more now than in the past, and we do so by a substantial amount. At least, this is answer given by 'value of a statistical life' calculations.

To get an idea why this is so, see this piece by Steven Landsburgh: basically, as incomes rise, so does the calculated value of life. (See also this in the NY Times.)

Landsburgh cites this paper looking at estimated changes in the value of life for the US. The authors estimated that the value of life has increased by 300% to 400% between 1940 and 1980, rising from roughly US$1 million (in 1990 dollars) in 1940 to US$4 million to US$5 million (in 1990 dollars) in 1980. They estimate an elasticity of value of life with respect to GNP per capita of 1.5 to 1.7: in other words, a 10% increase in national income per head is associated with between a 15% and 17% increase in the value of life. 

This is an interesting application of this kind of approach to try to work out how much the US Army valued its soldiers' lives during Word War II.

Photo by Flickr user tweotwawki, used under a Creative Commons license.

You may also be interested in...

  • Popular 3 Mar 2017 11:01
    Le Pen says France could be a 'grande nation' again if it left the EU. Economists say it could send France bankrupt and may spark another financial crisis.
  • Popular 15 Aug 2017 11:30
    The White House seems to regard FONOPs as a means to induce Chinese concessions on the North Korean nuclear issue. This is not what these patrols are designed for.
  • Popular 8 Mar 2017 08:03
    You might notice something different on The Interpreter today. We will post our usual mix of thought-provoking analysis that today will take you from Mynamar to Japan, and from what's making news in the Pacific to war crimes in the Middle East. What will make it an exceptional day on the site is that all of these posts will be authored by women.