The value of life is the economic value used to measure the benefits of avoiding death. This is also referred to as the cost of living, the value of preventing death (VPF) and the implied cost of preventing death (ICAF). In the social and political sciences, it is the marginal cost of preventing death in certain classes. In many studies, its value also includes quality of life, the expected life span, as well as the earning potential of a particular person especially for payment after the facts in the claim of wrongful death suit.
Thus, it is a statistical term, the cost of reducing the average mortality rate by one. This is an important issue in various disciplines including economics, health care, adoption, political economy, insurance, worker safety, environmental impact assessment, and globalization.
In industrialized countries, the judicial system considers human life "priceless", thus disguising all forms of slavery; that is, humans can not be bought at any price. However, with a limited supply of resources or infrastructure capital (eg ambulances), or skills at hand, it is impossible to save every life, so some trade-offs must be done. Also, this argument ignores the statistical context of the term. It is not commonly attached to an individual's life or used to compare the value of a person's life compared to others. It is mainly used in a life-saving situation compared to taking a life or "earning" a life.
Video Value of life
Care in the economy
There is no standard concept for the value of a particular human life in the economic field. However, when looking at the risk/reward trade-off that people make related to their health, economists often consider the value of life statistics (VSL). EPA does not place a dollar value on an individual's life. In contrast, while undertaking a new environmental cost-benefit analysis analysis, the Agency uses estimates of how many people are willing to pay for a small reduction in the risk of death from adverse health conditions that may be caused by environmental pollution. This estimate of willingness to pay a small reduction in the risk of death is often referred to as the value of life statistics (VSL). VSL is the value that an individual places on a marginal change in the likelihood of his death. Note that VSL is very different from real-life values. This is the value placed on the change in the likelihood of death, not the price that a person will pay to avoid death. This is best explained by an example. From the EPA website:
Suppose everyone in a sample of 100,000 people were asked how much he would be willing to pay for their individual risk reduction died from 1 in 100,000, or 0.001%, over the next year. Because this risk reduction means that we would expect one fewer deaths among a sample of 100,000 people over the next year on average, this is sometimes described as "one life statistics stored." Now suppose that the average response to this hypothetical question is $ 100. Then the total dollar amount that the group will pay to save one statistical life in a year will be $ 100 per person Æ' 100,000, or $ 10 million. This is what is meant by "the value of statistical life."
Economists often estimate VSL by looking at the risks that are voluntarily willing to be taken and how much to pay to take it. This type of study, which looks at one's actual choice, is known as the study of preference revealed. A common source of the choice is the labor market, where jobs with a greater risk of death are seen to correlate with higher wages.
Many of these studies employ a wage hedonic approach, which looks at how wages change with changes in job characteristics. Such studies reduce wages in job characteristics such as risk of death, employment, industry, risk of injury, location, etc. By controlling as much of the job characteristics as possible, the researchers hope to reduce the share of wages that compensate for the risks. death at work. A summary of this literature is a 2003 paper by Viscusi and Aldy.
Another method that can be used by economists to estimate VSL is to simply ask people (eg via a questionnaire) how much they will be willing to pay for a reduction in the likelihood of death, perhaps by purchasing safety improvements. This type of research is referred to as the stated study of preference. A well-known problem with this method is the so-called "hypothetical bias," in which people tend to overestimate the judgment of their goods and services.
VSL policy app
The VSL estimate of wage hedonic is what EPA uses when evaluating the health benefits of the program. From EPA:
- Beginning in 2004 the EPA Air and Radiation Office (OAR) used an estimated $ 5.5 million (1999 dollars, $ 6.6 million dollars in 2006) for air regulation analysis. This estimate comes from the estimated range of values ​​in three VSL meta-analyzes conducted after the EPA Guidelines were published in 2000 (Mrozek and Taylor (2000), Viscusi and Aldy (2003), and then, Kochi, et al. (2006)). ) However, the Agency does not alter its official guidance regarding the use of VSL in the creation of rules or subject to temporary estimates to the scientific peer review process through the Science Advisory Board (SAB) or other peer review groups.
Data for this study often include wage data from the Current Population Survey and workplace risk data from the Fatal Work Injury Census. Both sets of data were collected on behalf of the Bureau of Labor Statistics.
For example, the EPA's retrospective study of clean air actions, which focuses "particularly on sulfur dioxide pollutant criteria, nitrogen oxide, carbon monoxide, particles, ozone, and lead", found that the benefits of the program, largely from improved health, :
- The direct benefits of the Clean Air Act from 1970 to 1990 include reducing the incidence of a number of adverse effects on human health, increased visibility, and avoiding damage to agricultural crops. Based on the assumptions used, the estimated economic value of this benefit ranges from $ 5.6 to $ 49.4 trillion, at 1990 dollars, with an average, or estimated central tendency, of $ 22.2 trillion. This estimate does not include a number of other potentially important benefits that can not be measured easily, such as changes in ecosystems and human health effects associated with air toxins. This estimate is based on the assumption that the correlation between exposure to elevated air pollution and poor health outcomes was found by epidemiological studies showing a causal relationship between exposure to pollutants and adverse health effects.
- The direct costs of applying the Clean Air Act from 1970 to 1990, including annual private sector expenditure and program implementation costs in the public sector, totaled $ 523 billion in 1990 dollars.
The value of improvement for health conditions is converted to dollars by estimating the resulting decline in mortality incidents and assessing these changes using VSL estimates from the literature. Specific value tables used for various health improvements can be found in the executive summary of the report.
Maps Value of life
Tobacco industry
The tobacco industry is particularly concerned with the calculation of the value of life since it was attacked regularly in the 1980s and 1990s for the "social cost" of smoking on the national economy. The economic argument for increasing cigarette taxes is that this tax compensates countries for a wide range of cigarette-related externalities, including hospital and medical costs for smokers and non-smokers, disability pensions for smoking-related diseases, welfare payments given to couples who still alive, the cost of cleaning roads, houses and offices, home burdens and forest fires, etc.
To counter this argument, the tobacco industry is increasingly being forced to withdraw from calculations made by a network of working academics, who are paid to write open articles for their local newspapers stating the notion that smokers are 'paying their way'. They rely on an argument by Kip Viscusi known as "death benefit" - the idea that, since smokers die earlier than nonsmokers, the country has saved hospital, pension and nursing costs, and that it offset many costs external (depending on how this is calculated).
Usage
Because resources are limited, trade-offs are inevitable, even regarding the potential decisions of life and death. Assignment of values ​​to an individual's life is one possible approach to try to make rational decisions about this trade-off.
When deciding the appropriate level of health spending, a common method is to equate the marginal cost of health care with marginal benefits received. To get the marginal benefit amount, some estimated live dollar values ​​are needed. But the level that can be done is limited by available resources. So while it may be 'profitable' to spend more it is impossible, or else it requires deficit spending that causes other expected consequences to be expected to be less.
Its rational strategy is to determine how much can be spent to save lives and then allocate it to the most profitable way until the money is fully allocated.
In risk management activities such as in the area of ​​occupational safety, and insurance, it is often useful to provide appropriate economic value to a particular life. There can be no system that is completely safe or risk free - people can always make the system safer by spending more money. However, there is a diminishing return involved.
In the mode of transportation, it is important to consider the external costs paid by the community but not counted, to make them more sustainable. External costs, although comprising impacts on climate, crops and public health among others, are largely determined by the impact on mortality rates.
Estimated value of life
Equivalent parameters are used in many countries, with significant variations in the specified values.
Australia
In Australia, statistical life values ​​have been set to:
- $ 4.2m (2014)
- $ 182,000 per year (2014)
New Zealand
In New Zealand, the value of life statistics has been set at:
- $ 2 million (1991) by NZTA
- $ 3.85 million (2013) by The Treasury
- $ 4.14 million (2016) by NZTA
Russian
According to different estimates, the value of life in Russia varies from $ 40,000 to $ 2 million. On the results of the assessment of the voting value of life of the polls (as the cost of financial compensation for death) at the beginning of 2015 is approximately $ 71,500.
United States
The following estimates have been applied to the value of life. Estimates are for one year additional life or for a single life statistic score .
- $ 50,000 per year of quality of life ("dialysis standard", which has become the de facto standard of the most private international standards and government-run health insurance plans around the world are used to determine whether to cover new medical procedures)
- $ 129,000 per year quality of life (renewal for "dialysis standard")
- $ 9.1 million (Environmental Protection Agency, 2010)
- $ 7.9 million (Food and Drug Administration, 2010)
- $ 9.4 million (Department of Transportation, 2015)
- $ 9.1 million (Prof W. Kip Viscusi, Vanderbilt University, 2013)
- $ 9.6 million (Department of Transportation, August 2016)
The income elasticity of the statistical life value has been estimated from 0.5 to 0.6. Emerging markets have a smaller value of life statistics. The statistical value of life also decreases with age.
Historically, children are not valued very much but modern cultural norms attach a much higher value.
Criticism
There is also an intergenerational aspect of the value of life. Some economists calculate the social discount rate based on the prevailing interest rates on financial markets. The higher the social discount rate, the more generations that are devalued compared to the current generation.
The anti-globalization movement leads to a clear distinction between the values ​​set for life in developed countries versus developing countries - especially those reflected in World Bank, World Trade Organization (WTO) and International Monetary Fund (IMF) decisions. They point to such figures as the Intergovernmental Panel on Climate Change (IPCC) assuming that developed countries can pay fifteen times more than developing countries to prevent deaths from climate change, as evidence of a systematic waiver of the poorer statistical values ​​of the Southern life , compared with the more advanced North. Some people are also concerned that a more standardized global life mechanism could have consequences for people working in developed countries.
See also
- The question: What is the value of life?
- The psychological significance and value in life
- Rational choice theory
- Utilitarianism
- Value (personal and cultural)
- Intrinsic value (ethics)
- Live year adjusted for disability
- Hedonic Damage
References
Further reading
- Kevin M. Murphy and Robert H. Topel (2006). "Health and Longevity Value", Journal of Political Economy , 114, p. 871-904. doi: 10.1086/508033
- Thomas C Schelling (1987). "Values ​​of life", The New Palgrave: Economic Dictionary , v. 4, p. 793-96.
- W. Kip Viscusi, "Values ​​of Life: Estimates with Risks by Employment and Industry" (same title as in Economic Inquiry 2004 42 (1), January 2004, pp. 29-48).
External links
- "Motor Vehicle Accident Fees". US Department of Transportation. October 31, 1994.
Source of the article : Wikipedia
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