The potency of life (or cost of life) is an economic value assigned to life in general, or to specific living organisms. In social and political sciences, it is the marginal cost of death prevention in a certain class of circumstances. In many studies the value also includes the quality of life, the expected life time remaining, as well as the earning potential of a given person especially for an after the fact payment in lawsuits for wrongful death. As such, it is a statistical term, the cost of reducing the average number of deaths by one. It is an important issue in a wide range of disciplines including economics, health care, adoption, political economy, insurance, worker safety, environmental impact assessment, and globalization. In industrial nations, the justice system considers a human life “priceless”, thus making any form of slavery illegal; i.e., humans cannot be bought for any price. However, with a limited supply of resources or infrastructural capital (e.g. ambulances), or skill at hand, it is impossible to save every life, so some trade-off must be made. Also, this argumentation neglects the statistical context of the term. It is not commonly attached to lives of individuals or used to compare the value of one person’s life relative to another person’s. It is mainly used in circumstances of saving lives as opposed to taking lives or “producing” lives.
The following estimates have been applied to the value of life. The estimates are either for one year of additional life or for the statistical value of a single life.
$50,000 per year of quality life (international standard most private and government-run health insurance plans worldwide use to determine whether to cover a new medical procedure)
$129,000 per year of quality life (based on analysis of kidney dialysis procedures by Stefanos Zenios and colleagues at Stanford Graduate School of Business)
$9.1 million (Environmental Protection Agency, 2010)
$7.9 million (Food and Drug Administration, 2010)
$9.4 million (Transportation Department, 2015)
$9.1 million (Prof. W. Kip Viscusi, Vanderbilt University, 2013)
When a soldier is killed in Iraq, “the government pays the family $600,000. I guess that’s what they think a life is worth.” – John Mueller, a political scientist at Ohio State University
“U.S. Office of Management and Budget puts the value of a human life in the range of $7 million to $9 million.”
The income elasticity of the value of statistical life has been estimated at 0.5 to 0.6. Developing markets have smaller statistical value of life. The statistical value of life also decreases with age.
Government entities have varying opinions on what a dollar amount for human life should be based on statistics and risk/benefit calculations. For many, a loved one’s life is considered priceless; but, for the people that just see the monetary value they have to calculate out how much it is worth, without any emotional consideration.
Many larger industries, such as tobacco or automobile, often have recalls or health risks. They generally know about the problems, but from a monetary perspective, realize it is better for them, financially, to pay out the families for their loved ones health or life, rather than pay to fix all the known problems. One major example of this is when Ford first launched the pinto, which had a known fuel system issue that led to explosions. Several people lost their lives but ford just paid for it and left the problem alone. The fuel system problem could’ve been solved for $1 per vehicle.
So, as you can see, the numbers vary greatly on the value of human life. What do you think about it? can a value be set?