Many pandemic cost-benefit analyses estimate larger containment benefits than did I, mainly due to larger costs for each life lost. Surprised to see this, I’ve been reviewing the value of life literature. The key question: how much money (or resources) should you, or we, be willing to pay to gain more life? Here are five increasingly sophisticated views:
"This reduction of the value of life to risk aversion (really concavity) helps us understand why the value of life varies so much over individuals and contexts, as we also see puzzlingly large variation and context dependence when we measure risk aversion. I’ll write more on that puzzle soon."
Has this been written? Is this "Problem-Owners Tolerate Risk"?
Yes, these values can differ, though the larger that difference the more that our collective institutions are failing us.
Re: "The key question: how much money (or resources) should you, or we, be willing to pay to gain more life?" Those are two questions. The value you put on your own life (e.g. as revealed by how much you will pay for life insurance) can be very different to the value the rest of society puts on your life (based on your costs and benefits to society).
I have no idea what you are talking about.
Since we are using discrete relative values we have the aggregate formula in an optimum S&L bank. If parties are risk adjusted and utilized on demand deposits and loans and banker market risk was bounded; then supply of consumer goods should be in balance with the supply of life extending goods.
Or if we had a Boltzmann constant for the economy, we could just treat your ratio as an exponent of partition. Boltzmann lets us go from Bayesian space to sample space because aggregate system under samples the environment.
As you say, with a gun pointed at our head we would give all we had.
I dont think that is true. Lets take a different situation, an illness. You have $1MM in assets. You can die in a week or you can pay for medicine that will extend your life at $100k/yr. Would you spend all $1MM? Or maybe buy just 1 more year and leave the rest to your heirs?
At $10k per year, I would load up, maybe buy 30 years. Or even more. At $1k per year, i would buy 70 more. At $100k, I might buy 2. At $1MM per year, I would pass.
Add the amount you can borrow and not pay back to get a new budget. It is still finite.
There's another asymmetry involved, one between gains and losses. "If you sacrifice your life your heirs will receive $X" is psychologically distinct from "It will cost $X to save your life".
I object to one of your premises. It is quite possible, and in fact easy, to spend more than you have. It's called debt. And it is also reasonably common for people to die with outstanding debts that cannot be collected because they are greater than the value of their estate.
I know what you are saying, Robin, but the fear is that the micro-economic theory of preferences is an crude and unenlightening instrument for the examination of the value of life, for the reasons I stated. It is premised on a form of methodological individualism that takes for granted the initial distribution of values. That social distribution of values is logically prior to individual preferences and, in my view at least, invalidates any attempt to infer anything of any philosophical or moral significance from individual preferences. What you isolating is not 'preferences', but something more like 'bargaining position'.
Should the value of an individual's life be based on their bargaining position? That's an uninspiring view of human life, morality and society, to say the least.
I was objecting to the claim that the rich value their lives more, not to the claim that they "assign a higher dollar value to their lives". The point is that willingness to pay (in dollars) is not an adequate interpersonal measure of (real) value, when different people have different amounts of dollars available.
It's similar to suggesting that bald people value their lives less, because they would be willing to remove a smaller number of hairs from their head in order to save their life than someone with more hairs available. It's just a transparently bad measure. You could respond by saying that bald people assign a "smaller hair-value to their lives". But the point is that that measure of "value" is misleading and irrelevant.
As usual, for theory we look at relative values near the optimal choices.
I don't follow step 4.
Are you saying that because of diminishing returns the richer you are, the less you value money relative to longevity?
If it is, I am not sure why the relative valuation of the two is a real standard of preferences.
If A has 10/10 wealth and 6/10 health, they may value more health over more wealth. If B has 3/10 wealth and 5/10 health, they may value more wealth over health. But in both case, their preference is conditioned by the values of health and wealth they begin with. If someone holds me up with a gun, and demands that I choose one of two options, to be shot in the head, or to be shot in the arm, I'll choose the second. But that preference is obviously conditioned by the structure of options open to me. I will have a further, context-independent preference to not be shot at all. Similarly, B will have a preference independent of their starting values.
The problem is a methodological one, then, that to judge social policy according to individual preferences, simply takes as a given the prior existence of a certain distribution of values (namely, of wealth and healthcare). A better approach, perhaps, is to establish an absolute standard of values below which no one should fall in the first place, i.e. that A, B, and everyone else, should all possess a right to 6/10 wealth and 8/10 healthcare. That is precisely the route that the majority philosophers take, e.g. Sen's capabilities approach, Rawls' primary goods, Shue's basic needs.
I'm not sure I see a difference between "the rich assign a higher dollar value to their lives" vs "the rich assign a lower life value to their dollars". I don't think diminishing marginal utility of money invalidates "the rich value their lives more".
I don't see what patents or profiteering have to do with this.
Is it really that hypocritical?
As you say, with a gun pointed at our head we would give all we had. Similar with a gun pointed at the head of someone we love, and possibly even a stranger. But in situations with less certainty we accept some risk and put an implicit value on life.
As situations move from the uncertain to the certain the way we view them changes in a way that's consistent with the above and *makes sense for ones general well being*.
The issue is that risk pooling of health costs means we have a system that requires the administrator to stay in the uncertainty world when they are making decisions where the uncertainty has gone. People have trouble getting their heads around that, especially when most people won't really have thought through it in an objective manner as you do. And, I expect, that if the administrator had personal involvement - their friends' kid - more expensive treatment might be available.
Also, often the marginal cost of treatment will be affordable and you're letting someone die for the sake of your patent system. Again, this may be for the greater good, but it really is difficult moral ground. Especially - I would argue - with the apparent inefficiency and profiteering central to the US's health system.