Saturday 24 Feb 2018 | 13:41 | SYDNEY
Saturday 24 Feb 2018 | 13:41 | SYDNEY

The economic value of life

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

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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.

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