As was bitterly noted by Oscar Wilde, “nowadays people know the price of everything and the value of nothing” – and this appears sensible after some contemplation about shameless mark-ups, neglect of health and safety guidelines, asymmetric information and conspicuous consumption. Mr. Wilde’s observation could find supporting evidence in pretty much any individual market, from smartphones to bottled water; however, some difficulties may kick in in estimating the price of… everything. Statistically speaking, how much is the experience of being alive worth? What is the price of a human being? Are some more expensive than the others?
Every day such casually philosophical questions are implicitly tackled by cold-blooded legislators. How much survival equipment for road accidents should every car carry? Should plants and transport cut carbon emissions? What is a reasonable amount to pay for saving a person from dying? Their assessment of cost-efficiency is based on an estimate whether a certain safety regulation would implement greater costs than how many dollars’ worth of human lives it's likely to save. According to Frank Partnoy, an American legal scholar and writer, technical calculations carried out by the U.S. Office of Management and Budget arrive to the result between $7 million and $9 million. In 2011, the Environmental Protection Agency set the value of a human life at $9.1 million, whereas the Food and Drug Administration put it at $7.9 million. Cynicism aside, can any of these figures be correct?
It certainly depends on definition of ‘life’. Life-long free will is being bought and sold at prices well below the considerate estimates of the US government. For instance, according to Zapponi (2014), purchasing power held equal, a male slave in Ancient Egypt was worth $32,000; during the Roman Empire the price for a gladiator was $2,080; by 1850 the price inflated to $30,000 for a male slave in New Orleans. Nowadays, ‘values’ of humans vary from $2 for a trafficked girl in Mozambique to $100,000 for a US military personnel. However, the alleged price of life calculated by the US officials and the market value of a slave may not be comparable. It can be argued that the former encompasses the whole experience of being alive; in the case of the slaves, it’s the price of their life-long free will.
None of the above can be called marketable, and hence exact prices are unidentifiable. Nonetheless, a 1974 model by two Princeton economists suggests using suicide rates to represent demand for living. Instead of prices or wages though, this curve would depend upon the extent to which one finds the experience subjectively rewarding. Paradoxically, the statistics by the World Health Organisation suggest that life can be seen as a Giffen good: countries with favourable standards of living, such as South Korea or Japan, are amongst the nations with the highest suicide rates. Famous for promoting Gross National Happiness as a government policy, Bhutan is also a country that most wouldn’t expect on that list.
Still, correlation between welfare and ‘demand for life’ is not very pronounced. Since there are no expressed market forces in this case, in neoclassical style, utility could be assumed as the main determinant of demand. Then, the curve could be upward-sloping – the greater the utility, the fewer individuals make a decision to withdraw. Alternatively, it could be a step-up graph, with the critical time points identified as the most important by Mark Twain: the day when you were born, and the one when you understood why.
Image from: https://pixabay.com/en/photos/scales%20of%20justice/
