Despite your strong beliefs that your life is priceless, for Governments’ it’s not worth more than a few millions.
Putting a price tag to life may raise several ethical concerns. However, it’s more common than you think and it’s not an exclusive issue of Governments, courts or insurance companies. Even you, in your day-to-day life, make decisions that easily illustrate this phenomenon. For instance, have you vaccinated yourself against human papillomavirus or was it too expensive? Did you change your old, flat tires or did you save that money to compensate the tax rises?
These are simple examples of what you could do to reduce your likelihood of death and your answers reflect how much you value your own life (which it’s not infinity).
Governments do the same to determine which policies/regulations to adopt. Briefly, they compare the costs of a certain policy able to reduce the risk of a premature death with its potential benefits, measured by the value of lives that will expectably be saved. There are several ways to estimate this value, all with the same underlying idea: how much would a person be willing to pay to reduce her likelihood of death? Legislators can either use stated preference studies – where they explicitly ask individuals this question –, or wage-related studies – where they simply observe the behavior in the labor market, mainly the wage premiums required to work in jobs with higher risk. After some calculations, researchers can get to – some people say – a very close estimate of the value people place in life – the value of a statistical life (VSL).
Why is this method not pacific?
I won’t even discuss the ethical implications of valuing life in monetary terms. In a perfect world, where no scarcity of resources – especially monetary ones – exists, this could be a pertinent question. Nevertheless, in reality, decisions have to be made and some criterion is needed to drive them.
Even when it comes to the way it’s calculated, I don’t give much importance to the claims that it does not fully consider the human idiosyncrasies and heterogeneity. I do agree that people don’t value life in the same way and their different risk profiles may affect their willingness to pay for risk reductions. However, in my opinion, if the sample inquired/analyzed is sufficient big and representative, at the end of the day, the differences are washed away and the result is quite reliable.
However, what about the countries asymmetries? Can we stay indifferent to them? Imagine scientists discover a vaccine able to make women immune to breast cancer. Simultaneously, the Governments of Portugal and Germany carefully assess the VSL to determine whether it should be covered or not. Assuming the same prices and risk reduction, the VSL is the only parameter that matters in their decision. Whichever method they choose to assess it, the VSL will likely differ, mainly because the ability – more than the willingness – to pay varies with income. Since the average per capita income in Germany is higher than in Portugal, it is likely that the vaccine becomes subsidized in Germany and not in Portugal.
But do we really agree that the benefits of risk reduction have a higher value in Germany (if the prices in Portugal and Germany are the same)? In other words, is saving a German life more valuable than saving a Portuguese one, just because Portuguese people are less willing to pay for the risk reduction?
Especially in times of crisis, it’s understandable that people are more willing to accept riskier jobs or less willing to pay for risk reductions. Therefore, the VSL are highly biased by economic conditions, as well as other cultural factors. However, when assessing the viability of the same policy in different countries, should the VSL vary, possibly leading to different policy decisions?
For me, human life, whether it’s Portuguese or German, should be worth the same, regardless of budgets and economies. Even though the increased difficulty that it would represent, I believe that when it comes to the possibility of preventing death and illnesses, we should not talk about several VSL, but a single, comprehensive and global value of statistical life. This methodological change would inevitably imply costs, but will also represent an important step towards a more equitable and fair access to health and health care in the world.
Ana Margarida Lemos