Thursday, October 8, 2009

The Value of Life

"The Question" in Detective Comics #857 by Greg Rucka and Cully Hamner (2009)

Hmm...I don't know about that, Tot. I think people who sell human lives think of them as a pretty damn expensive commodity. After all, they know just high highly valued human lives are and are cognizant that certain types of people value them so highly that they'd be willing and able to pay very large sums for them. It's a money maker.

Economists value lives too, but in a different way. Actually, they have done considerable work on this. Of course, the economic "value of life" is a statistical in nature and should not be confused with value in the sense that "life if priceless." Rather, "value of statistical life" estimates see what people would be willing to pay or sacrifice to reduce the probability of death. The thing is that most of us (unless you were someone like, say, The Joker) would be willing to give up all of our wealth to avoid a 100% probability of death. Yet, when it comes to smaller probabilities, individuals make trade-offs between monetary wealth and safety every day. People pay for health insurance, get vaccines, buy alarms for their houses, etc. Similarly, people accept small risks in order to not expend anything. When someone jaywalks, for instance, that person is subject to a tiny increase in the probability of death for the payoff of saving a few seconds of time. These implicit trade-offs are what make up the value of a statistical life.

Economists, policymakers, federal agencies and others use such estimates to evaluate the potential benefits of public policy programs, particularly those involving health, environment, workplace safety and transportation regulations. There are numerous studies and methodologies to arrive at these estimates. Some use surveys that flat out ask what individuals would be willing to pay to diminish the probability of death. Others look at data on individual expenditures and purchases to construct variables that portray willingness to pay (i.e. pay for safety) or willingness to accept (i.e. get paid for a risk). For instance, this paper looks at the trade-off between worker fatality risks and wages using BLS data on worker deaths by occupation and industry. It estimated a value of $4.7 million for the full sample used, $7.0 million for blue collar males, and $8.5 million for blue collar females.

I haven't kept up with the research, but most estimates I have seen tend to hover around $7-$8 million or so. In June 2008, the EPA had estimated the value of a statistical life to be $6.9 million (about $1 million less than five years ago), which prompted the media to have a field day about the devaluation of human life.

Here's an NBER paper about general problems and uses of value of life estimates.

What do you suppose the human traffickers that Renee Montoya is hunting charge for lives they sell? I know that this is a different value than the one we just discussed, but do you think it's more than $7 million?

Edit: Apparently it's much less, according to a comment. The lesson here is that the economics in action movies are generally unreliable.


kmitcham said...

I don't think any of the human trafficers in the real world (forced prostitution, or more direct slavery in parts of Africa) value life that highly. I'm be surprised if the average price of a sold human was over $50,000.
Aha. google to the rescue
around 9:10, says the price of a human is about $90, down from the historical average of $40,000. So while people may value their own lives much more highly, the price of someone else is quite affordable.

ShadowBanker said...

Wow, I didn't expect that, but then again I confess to knowing more about the statistical value of life than the value on the black market. My knowledge of that came primarily from movies starring people like Liam Neeson.

Smooge said...

The cost of a life is dependant on what it is being used for. Human trafficking for forced labour in a mine, low-end prostitution, textile mills or agricultural is going to be pretty low. The cost of $90.00 seems a little too low because it doesn't cover the cost of shipment or delivery.. though in some cases you get the forced labour to do it for you. It also doesn't cover minimal amounts of food, and guards. I would put it down to being less than paying a person minimum wage or near abouts.

Now for more valued persons (luxury prostitutes or 'brides') or maybe forced scientists for someone like MODOK or Ra's Al Ghul is going to be a lot more. In that case the value would be higher but probably not the statistical value of a person because you aren't going to 'use' that person for 50 years or so. Someone like M.O.D.O.K is probably going to use them for 6 months and then have them die when the lab explodes.

ShadowBanker said...

Smooge - So you think that black market human traffickers should actually create a cost structure that is scaled based on the value of a statistical life and the duration of use?

Smooge said...

@ShadowBanker I think that it would work out in a world where supervillians/nations existed. To be honest I think that people like M.O.D.O.K. or Brainiac would compute out that in their price dealings. People like the Joker and such probably would not but enough of the 'evil scientist' types would work out cost-averages and such to set a base market.

I could see someone like the Shadow Broker setting up not just things like "Here is your abandoned factory" but "here is your band of thugs" and "we got you a couple of technicians to build your weapon" to "you are looking for some pricey people there for that city smasher... especially ones who aren't already trying to build it for someone else... oh you don't mind getting those... well give me a week"

The Human Broker would look at it as investment.. it costs this much to find this person, and the more specialized the more likely it will get the attention of governments or super-heroes. That gives you a minimum risk price. On the other side there is what that person would be worth. Lets say that a super-scientist is worth say 100 million versus the average 6 million over a lifetime... The Human Broker would know that its going to cost him X to steal the person, and keep them locked up 'safely'. He then will want a return on that investment to make sure its worthwhile (or to make it so that the Joker isnt asking every week for another set of scientists.. well he can ask but unless he has 20 million its not happening).

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