Is the value of a British person’s life greater than the value of an Iraqi person’s life?
Andres Arauz, Michigan
One onlooker may find it perfectly natural that a single British death grabs headlines, while Iraqi deaths go unnoticed. Another may be horrified, believing that all human life is equally valuable. So you are raising an emotive and controversial question.
Fortunately, economic analysis removes all the controversy. You will have one view of the value of a British life and an Iraqi life, I may have another. So it helps to take the economic viewpoint: your life is worth whatever you think it’s worth, my life is worth whatever I think it’s worth. Economists respect your own opinion about your own life, and nobody else’s.
Of course, if I simply ask you what you think your life is worth, you may be tempted to exaggerate, so economists judge people based on their actions. Dangerous jobs tend to earn higher pay, while activities such as buying smoke alarms or buckling seat belts carry their own costs as well as bringing safety benefits.
Observing what people actually do makes the value of life not a theological or philosophical concept but an arithmetical one.
A typical calculation: you might pay up to $6,000 on a safer car that reduced your risk of dying by one in a thousand. Six thousand divided by one in a thousand is six million, so you are valuing your own life at about $6m. This is a typical result for residents of the US.
Researchers have tended to find lower valuations in poorer countries, which is not surprising: if I am poorer than you, I have less to spend on everything, including my own safety. That seems unfair, but the different valuation is a symptom of inequality, not its cause. I will just have to get used to it.
Also published at ft.com.