What's the value of a life in the age of Corona?
Updated: May 10, 2020
"We care about life only when we realize its value" Jean-Jaques Rousseau
What 's the current price tag on a human life? Sure, you might say "priceless", but we all know better. Economists, businesses, and governments are always trying to come up with a value to determine what's lost when we end a human life too early. In this age of Covid-19, these calculations are front and center as leaders try to assess risks of exposing employees and customers to a potentially deadly virus.
Health insurance companies have used a standard of $50,000- $129,000 per year of expected life to decide whether to cover treatments that will extend it. If your procedures cost more than that standard, you die. The average life insurance death benefit in the US is around $168,000. The average lifetime earnings of a person has been used to value the price tag, and that can vary from $200,000 to maybe $2 million in most cases. Wrongful death judgements from juries are all over the place- from $200,000 to $20 million. The US government uses the most reliable standard- VSL, value of a statistic life, a mathematically obtained estimate to decide whether a regulation that saves lives is worth doing. Their values are the highest- from 7 to 10 million dollars, and they take in a wide variety of behaviors that indicate how we as citizens value our own lives.
The human price tag has an enormous effect on our lives. It's why airbags were required in all cars despite serious opposition from the automobile industry. Airbags have saved some 50,000 American lives since their introduction, as well as preventing many more serious injuries and hospitalizations. On the other hand, seat belts in school buses don't cross the threshold, as only about 10 passengers a year are killed in accidents.
This grim utilitarian calculus goes on behind the scenes all the time- where the cost of doing something in deaths is weighed against the jobs created and money made that will offset them. The lives saved by regulations are weighed against the costs incurred to follow them.
Which brings us to today's predicament. Leaders around the world are facing a dilemma regarding when to open up their economies. If they open too quickly, many more people die. If they open too slowly, the hit on the economy becomes too painful, with all kinds of downstream consequences. There is no one right answer here. The blind are leading the blinder. We're seeing a wide variety of approaches around the world, including between Missouri and Illinois, and now we wait to see what works and what doesn't.
Even worse, politicians are now playing games with the death tolls. Some believe that diagnostic testing is being suppressed so as to not add to the totals of cases or deaths. Some state and local health departments are not releasing accurate numbers. Those who lean one way politically think the numbers are being exaggerated, while others think they're too low. It's almost as if by bending reality to our liking, the pain somehow becomes a bit less than it really is.
Let's do some math. Estimates of the mortality rate on Covid-19 have been all over the place, but lets use 3%, which was one WHO estimate. In theory, if everybody in the US got the virus, approximately 10 million people would die. If you used the upper government price tag on a human life of $10 million, you come up with a potential worst case scenario of 100 trillion dollars lost to Covid-19, or five times the size of the entire US economy. That's how big the stakes are.
In addition to the deaths, there are the millions of people who would be hospitalized or having lasting health damage, as well as inestimable people who would die from other causes because they couldn't get into the hospital to get treated.
It's unfortunate that the debate over opening the economy during a pandemic has now taken political dimensions. This isn't a liberal or conservative virus. There are serious repercussions in both directions when we act or fail to act. The goal here is to improve testing and treatment while finding a vaccine, minimizing human suffering. At the end we want to have an economy that can function fully again with acceptable risks for all involved. We need to come together and clearly see the risks and the science as a nation.
Those who want workers to risk their lives so that we can go back to business as usual need to look at the price tag, and be willing to fork over $10 million to every family of those who die because of our choices. Part of the problem is that we are so divided that we discount the value of the lives we judge as "other". Because this disease now hits those on the lower levels of society harder, those who can't afford to work from home, their lives are deemed as less valuable than others. We see many humans as expendable, especially if they aren't like us. Viruses don't look at us that way- we are all just hosts to them- a way to hop onto the next victim.
Our true value is infinitely greater than $10 million. Be careful out there and treat everyone you meet as if they were your grandmother. We can do this.