Value of human life

• starsrock

  Hi Friends.
  
  In theory, a year of human life is priceless, in reality, its worth $50,000. That's the international standard most private and government-run health insurance plans worldwide use to determine weather to cover a new medical procedure. And it must guarantee one year of "quality life" for $50,000.
  
  New research, however, argues that figure is far too low. Stanford economists have demonstrated that the average value of a year of quality human life is actually closer to about $129,000.
  Thanks.
• McFly1955

  

  I have no clue where I would even begin if someone came up to me and asked me to calculate this...
• fan_from_texas

  Courts routinely value a human life for things like wrongful death suits. Generally, some actuary busts out a table, runs some numbers, brings it back to net present value, and determines what seems fair.
• power i

  

  A friend of mine's wife died and he sued the insurance company (long story). A jury awarded him one million dollars for each year she was old when she died.
• Con_Alma

  FFT
  
  ...but those human life calculations tend to be based on opportunity costs and life expectancy based on 1980 mortality tables.
  
  I would argue the value of human life far exceeds our earning potential or the value for the services we avoid paying for due to our own actions or labor.
• Cleveland Buck

  

  Ask the Federal Reserve what the value is on the bonds they hold for each of us.
• Con_Alma

  They don't hold those bonds...other people have bought them.
• Cat Food Flambe'

  

  << actuary
  
  Many, many factors are involved (some of the programs have a several hundred variable inputs), but the simple version in calculating the monetary value of a human life is future earning power for the remainder of their expected life less calculated expenses.
  
  Reduced to a cold, hard, rational socio-economic analysis, the life a healthy 25-year-old college graduate or skilled tradesman is going to have a lot higher monetary value, than, say, a seventy-year-old, a hemophiliac, or a high-school dropout.
  
  Much of younger person's expected lifetime earning power hasn't been realized; therefore, they need to around to convert their potential into tangible assets. If you're older, have very high expected liabilities or medical expenses, or have limited future earning power, the "net profit" that you would be expected to make over the rest of your expected life would be quite a bit less - or even a negative
• Con_Alma

  ...the question is can a monetary value be calculated on the benefits and impacts of life itself outside of their earning potential.
• Cat Food Flambe'

  

  By definition, no. But I wouldn't want to live in a perfectly rational world where all decisions were based solely on financial results.
  
  However, court cases usually allow for emotional distress, loss of companionship, etc. on the part of the survivors. That's not something you can dig up from an actuarial table (although I would imagine most courts have some sort of guidelines for such awards - FFT, do you have any insight about this?)
• Little Danny

  

  There's different elements of damages and a jury is given instruction on the breakdown. It is the jury who decides what the value of a Wrongful Death Trial. The experts will offer testimony as evidence for the jury to consider in the evaluation. As FFT noted, the plaintiff will typically hire a forensic economist to come into the court room and offer expert testimony on the economic elements of damages. The expert will provide analysis at present value. Sometimes, the defense will offer alternative figures.
  
  Truth be told, there is no science behind the value of human life. I have seen jurors give as low as $50K for the value of life and up to $10M. The fact of the matter is some of us are not worth a hill of beans and juries understand that.
  
  Here are some of the elements of damages the jury considers:
  
  Loss of support from the reasonably expected earning capacity of the decedent;
  Loss of services of the decedent;
  Loss of the society of the decedent, including loss of companionship, consortium, care, assistance, attention, protection, advice, guidance, counsel, instruction, training, and education, suffered by the surviving spouse, dependent children, parents, or next of kin of the decedent;
  Loss of prospective inheritance to the decedent’s heirs at law at the time of the decedent’s death;
  The mental anguish incurred by the surviving spouse, dependent children, parents, or next of kin of the decedent.
• Scarlet_Buckeye

  

  Blood Diamond is an awesome movie.
• Con_Alma

  Value doesn't have to mean monetary measurement.
  
  Life's non-monetary value is greater than it's financial calculated worth.
• Glory Days

  

  there was a show on the history channel that was interviewing this downed pilot in the pacific during WWII. he was picked up on an island by a tribe and traded to another tribe to get to safety. he was traded for a sack rice or something i believe, which he claimed is what he is worth.
• fan_from_texas

  Con_Alma wrote: Value doesn't have to mean monetary measurement.
  
  Life's non-monetary value is greater than it's financial calculated worth.

  Correct, but if you're arguing a wrongful death suit to figure out how much someone is worth, you've gotta start somewhere. As Little Danny noted, you tend to use NPV of future earnings as a base, and then allow a jury to attempt to quantify the intangibles. It's all over the map.
  
  As an aside, this is one problem I have with damages caps. If you base the value of a wrongful death suit solely on NPV of future earnings, it's okay to kill housewives who aren't working, minorities, and the uneducated. But don't kill an educated white guy, 'cause that gets expensive. Allowing the jury to tack on additional costs gives them a way to level the playing field and value a housewife/mother more than a businessman, if they feel like it. Capping those damages devalues the life of the non-income earning.
• Con_Alma

  I understand that FFT. My inquiries were leading questions designed to solict a greater and deeper answer than what is sought after in a settlement from a legal nature.
• Cat Food Flambe'

  

  FFT - "earnings" exist for housewives in the warped little world of actuarial science. . In fact, the annual monetary impact of the loss of a stay-at-home mother of two children under the age of 16 or so is considerably more that that of the loss of most non-parent college graduates.
  
  Of course, the annual loss eases as the children grow up.
• Little Danny

  

  fan_from_texas wrote:

  Con_Alma wrote: Value doesn't have to mean monetary measurement.
  
  Life's non-monetary value is greater than it's financial calculated worth.

  Correct, but if you're arguing a wrongful death suit to figure out how much someone is worth, you've gotta start somewhere. As Little Danny noted, you tend to use NPV of future earnings as a base, and then allow a jury to attempt to quantify the intangibles. It's all over the map.
  
  As an aside, this is one problem I have with damages caps. If you base the value of a wrongful death suit solely on NPV of future earnings, it's okay to kill housewives who aren't working, minorities, and the uneducated. But don't kill an educated white guy, 'cause that gets expensive. Allowing the jury to tack on additional costs gives them a way to level the playing field and value a housewife/mother more than a businessman, if they feel like it. Capping those damages devalues the life of the non-income earning.

  Actually the Courts allow you to calculate the economic loss of services of a housewife/mother in present value. In addition, you are able to pray for a component of non-economic damages for loss of society, consortium, etc. for a housewife.
  
  Regarding minorities, there are venues in this country where being a minority actually is of benefit. A white defendant often gets homered by jury verdicts in places like Chicago, Baltimore, Washington, DC, East St. Louis and Los Angeles.
  
  Capping the damages actually has very little to do with placing a value on life and more to with providing pricing stability to the insurance market.