How much is your life worth?


#1

You might think this is coming from our old friend, CarsCauseCancer, but not this time.

Today I was reading Michael Sandel’s Justice: What’s the Right Thing to Do? when I came to the following passage:

...the use of the automobile exacts a predictable toll in human lives – more than forty thousands (sic) deaths annually in the United States. But that does not lead us as a society to give up cars. In fact, it does not even lead us to lower the speed limit. During an oil crisis in 1974, the U.S. Congress mandated a national speed limit of fifty-five miles per hour. Although the goal was to save energy, an effect of the lower speed limit was fewer traffic fatalities.
 In the 1980s, Congress removed the restriction, and most states raised the speed limit to sixty-five miles per hour.  Drivers saved time, but traffic deaths increased.  At the time, no one did a cost-benefit analysis to determine whether the benefits of faster driving were worth the cost in lives.  But some years later, two economists did the math.  They defined one benefit of a higher speed limit as a quicker commute to and from work, calculated the economic benefit of the time saved (valued at an average wage of $20 an hour) and divided the savings by the number of additional deaths.  They discovered that, for the convenience of driving faster, Americans were effectively valuing human life at a rate of $1.54 million per life.  That was the economic gain, per fatality, of driving ten miles an hour faster.*

 Advocates of cost-benefit analysis point out that by driving sixty-five miles an hour rather than fifty-five, we implicitly value human life at $1.54 million....

*Orley Ashenfelter and Michael Greenstone, “Using Mandated Speed Limits to Measure the Value of a Statistical Life,” Journal or Political Economy 112, Supplement, (February 2004): S227-67.

My question to all of you is: Do you think this number ($1,540,000) is too low, too high, or just right? What monetary value would you assign to your life?


#2

According to my ex-wife, that $1.54M number seems about right.


#3

I question the methodogy that quantified the excess deaths per MPH. Much of what I’ve read suggests lottle if any fatality increase;certainly, of you look at a US “fatalities per” graph, any kink in the steadily-decreasing line is lost in the background noise…the only thing that stands out us an uptick during the WWII years…tire rationing, perhaps?

The Hurt report strongly suggests that (at least for motorcycles) speed relative to other traffic, not absolute speed, is what most strongly affects safety.


#4

What ‘excess deaths’? The fatality rate (deaths per million miles) has been dropping steadily, year by year.

I question the basic assumption of Sandel’s claims.


#5

Assuming that we are able to assess our own worth, my life is worth $450,000. At least that’s how much life insurance I carry. I think that’s all that matters…how can anyone else (judge and jury for example) come to any conclusion as to what my worth is. We’re all just dust in the wind, aren’t we?

As to the study, I see far too many variables based on your small excerpt. Need more info.


#6

@meanjoe and @texases,

Congress raised the speed limit from 55 MPH to 65 MPH in 1987, while the most significant safety improvements that led to a decline deaths happened years after that. That’s why I cited the source of the study. There is little doubt that the increase in deaths following the increase to 65 MPH was all about that extra 10 MPH.

These aren’t Sandel’s claims. They’re Orley Ashenfelter’s and Michael Greenstone’s claims. If you’re going to challenge the methodology, suggest you look up the study and be specific.


#7

@asemaster,

I think most juries estimate your life as a sum of the income you would earn by living to the national average age of death for your gender.

…and again, did you read the study? I’m amazed at how people can find so many flaws in it without having read it.


#8

For those of you who are interested in critiquing the study, here is a link to it.


#9

Whoever made the claim isn’t backed up by the data:

Here’s another plot, 1980 on, same conclusion:


#10

That is a comparison of the entire country (or is it the entire world? I can’t tell. Your chart doesn’t even have a title.). The cited study only looked at states where the speed limit was increased, and it compared them to states that didn’t change their speed limits to rule out other factors. Several other states didn’t increase their speed limits until years later, after safety equipment had been improved. This study looks at the impact of raising speed limits by 10 MPH in 1987, and it only looks at states that actually raised the speed limits at that time.

Again, if you’re going to critique the study, you really should read it. The purpose of the study was not to show that speed kills. We all know that depends on a lot of different criteria. The only purpose of the study was to determine what the increase in speed limit in 1987 said about how we value life in monetary terms.


#11

Those are US plots… of course.

I took a quick look at the study, seems that all roads had decreases, regardless of speed limit, so they’re claiming the larger decreases on some of the lower speed limit roads means there would have been similar decreases on the others had the speed limits not been raised. A small effect, not present in all cases.


#12

@texases,

EXACTLY! The increase in speed limit only had a small effect on fatalities, and they only used that small effect in their calculations for the study I cited.

Here is a plot that is actually relevant to this discussion. It comes from the study in question.

Now that we’ve determined that the study’s methodology is logical, can we get back to the original question?


#13

Well, one unintended consequence of a higher speed limit is that driving becomes more time-competitive with flying, so more drive. Given that flying is statistically safer, a higher speed limit (or better highway system) could result in more deaths, even if it doesn’t affect the per-mile rate.

Looking at the flying end, the PITA that is 9/11 security made air travel slower and less convenient, to the point that many opt to drive instead. So, even if such measures reduce the number of flight deaths, the may well be more than made up for by more fatal car accidents.

(Leading to an interesting follow-up: for national security and other concerns, is denying terrorists 100 dead passengers a worthwile goal, even if it costs, say, 150 extra car fatalities?)


#14

Traffic speed limit laws are STATE mandated…NOT Federal. What the Feds did though was threaten to eliminate highway funding if the states didn’t lower their speed limit. NH NEVER lowered their speed limit. They did however post lower speed limit signs.

The speed limit for most of my commute from NH into MA is 65mph. The AVERAGE speed of the drivers is about 75mph. Some stretches are over 80mph. We can lower the speed limit…but it has to be enforced…It’s NOT.

As to fewer deaths…I think there are fewer now. And that has a lot to do with safer cars. So it’s very difficult to compare one cause and effect to another cause and effect. Too many variables.


#15

I agree, the statistic are now and always have been faulty. There was no direct correlation between freeway speed and highway deaths. I used to have to commute 100 miles a day at 55 on four lane roads. The same roads that were built for 75. It was just plain a dumb thing to do. The traffic bunched up so bad that one quick stop affected ten cars behind you, and frustration abounded. Of course it was great for the highway patrol that concentrated on freeways instead of two lane roads.

On the other hand. Death is a certainty of life. It is only a question of how long life is prolonged. Really, a life with no risk? Drive a tank? How about a 10 MPH limit? Having no other frontiers to conquer, we moved into conquering risk and reducing all things with any risk. How sad. Some will not end until we all live in apartments in the inner city and take public transportation everywhere. I saw a green show on public tv the other day and the woman was wearing a helmet while refinishing the floor with a brush.


#16

@cdaquila,

I think this thread might set a new record for going off track at the fastest rate ever. Please feel free to delete or close this thread. Instead of discussing the monetary valuation of life, everyone has a myopic fascination with irrelevant details.

I should have known better.


#17

@Whitey, I just thought I’d need more details of the study, but I didn’t mean to derail.

Back to the topic, my life must be worth $450K because that’s how I insure myself. If I thought it was worth more wouldn’t I get more insurance? So what place would a jury have to find me worth more (I ask tongue-in-cheek)?


#18

That’s what happens when you use a 47 page paper to make your point.

There are lots of ways to see how society values a human life, this method came out with a very high value compared to most.


#19

???
You thought you could make a politically-charged claim, and not expect to have the methodology challenged? Please.

I don’t think that cost/benefit is the be-all, end-all for public policy decisions. Deciding whether gov’t should ban cigatettes/alcohol/drugs/guns/trans fats on cost/benefit basis totally overlooks that most individuals (myself included) place a high personal value on individual freedom and liberty that isn’t reflected in the equation. “This way lies nanny-statism.” I’d sooner have the freedom to make stupid choices, TYVM.


#20

Let’s go to the source of all things wise and insightful-

Security salesman: But surely you can’t put a price on your family’s lives?
Homer Simpson: I wouldn’t have thought so either, but here we are.

I forget where I read it but this is an interesting perspective-

Life is cheap, nature deals it out with a steady hand.

I couldn’t put a number on it myself. Sure, you could calculate lost earnings over a lifetime. But what about the things you can’t possibly put a value on? For example, what’s it worth to my son, who would grow up without his father? How do you ascribe a value to THAT?