AILSA CHANG, HOST:
Is it worth it to shut down the economy to save lives? Or should we let people die to serve the economy? Economists answer questions like this all the time by converting a single human life into dollars. Here's Sarah Gonzalez from our Planet Money podcast.
SARAH GONZALEZ, BYLINE: There is kind of an official price tag on human life. We can tell you what it is. One human life is worth about US$10 million. And here's the guy who helped us come up with this figure.
KIP VISCUSI: I've gotten a lot of criticism, and I still do.
GONZALEZ: Kip Viscusi is an economist at Vanderbilt University, and he says valuing life and making these kinds of lives-versus-money decisions comes from the world of safety regulations. The Department of Transportation, the CDC, the EPA, they all put a price on life. And they use this value to determine which safety regulations are worth the cost. Like, should we require companies to label dangerous chemicals to prevent deaths? Well, does labeling chemicals cost more or less than the costs of all the deaths if one life is worth a certain amount of money? If it's less, then it's worth it. Label the chemicals. If it's more, it's not worth it.
VISCUSI: Right.
GONZALEZ: Let those people die?
VISCUSI: That's what they do. I mean, that's - you know, they don't identify the people will die, but that's the consequences of doing this.
GONZALEZ: And Kip Viscusi and all these government agencies, they did not just choose a random value for life. They actually found a clever way to avoid choosing a number altogether. They looked around and said people, all of us, we are actually putting a dollar value on our own lives all the time based on the jobs that we do, how risky they are and how much extra money we require in wages for the risk of death. So they look at a bunch of workers - construction workers, nurses, coal miners, lawyers, something like that. And when you do that, today, across all jobs, Viscusi says 1 in 25,000 people will die on the job in a year.
VISCUSI: We don't know for sure, but we think on average one will die.
GONZALEZ: These are pre-coronavirus numbers. But to convince workers to take this risk, companies have to pay them an extra $400 a year - each of them. So if I accept $400 to take a 1 in 25,000 chance of dying at work, I have revealed, essentially, a value that I put on my own life. And if the group of 25,000 people get $400 each, that's $10 million.
So that is today's value of life - $10 million.
VISCUSI: Right, the value of a statistical life, we'll call it.
GONZALEZ: It's a statistical life, not a real life?
VISCUSI: Yes, it's a statistical life.
GONZALEZ: And government agencies use one value for all of us.
BETSEY STEVENSON: It's the same number whether you're 2 or 42 or 82.
GONZALEZ: This is economist Betsey Stevenson at the University of Michigan.
STEVENSON: That means we don't have a senior discount. That also means we don't have a baby boost.
GONZALEZ: One value, so Betsey Stevenson and Kip Viscusi and many other economists have used this value to do the coronavirus math. Epidemiologists said shutting down the economy could save 1 to 2 million lives. So 1 million lives saved at $10 million each, that's $10 trillion. That's about half of the U.S. GDP in a year.
STEVENSON: I think it does make it easier if you take a look at the math and you realize that we're talking about people's lives that are worth trillions and trillions of dollars.
GONZALEZ: Trillions and trillions of dollars' worth of people. Sarah Gonzalez, NPR News. Transcript provided by NPR, Copyright NPR.
