The Value of Life, Again

Bryan Caplan argues that the life of a 10-year-old is worth 100-1,000 times that of an 80-year-old. But he suggests the modal answer people would give is that the two lives are equally valued.

I’m not sure if he is right about what the modal answer would be that they are exactly equal (though see below for an attempt to answer this question). Surprisingly, though, roughly equally valuing all lives is actually the answer that a normal economic calculation, willingness-to-pay for risk reduction, would give you! Or at least roughly. I haven’t seen an estimate for a 10-year-old, but estimates of the Value of a Statistical Life for 20-year-old is roughly equal to an 80-year-old. I’ve written about this before, and here’s a summary of a working paper by Aldy and Smyth that I am drawing on. Middle age lives are worth more, using this method, though perhaps just 2-3 times more.

Caplan doesn’t directly connect his hypothetical to the COVID pandemic, but in the comments Don Boudreaux does make that connection and says that “surely the correct level of precaution to take against a disease that kills X number of old people is lower [than a disease that kills the same number of young people].” I find this a very interesting statement because Don Boudreaux, and many others, have been against just about any precaution (other than asking the elderly to isolate) in the current pandemic. Would he and others support more caution if they believed the VSL estimate to be true?

So who is right? Caplan’s intuition? Or the modeled VSL calculations? For surely these are miles apart, and they can not both be correct.

As an economist, I have a strong preference in favor of willingness-to-pay over our intuitions. Indeed, Caplan himself as defended the VSL approach quite forcefully!

First, based on what people say they would do, I think Caplan has it right, though 1,000 times might be a bit much. I would certainly give up my own life to save my child. I would probably give up my own life save a random child too, so that intuition fits with Caplan. However, always remember that talk is cheap.

But what Caplan is really proposing here is a variation on the Trolley Problem. And he has stated it in a very stark way: he would pull the switch to run over 1,000 80-year-olds if the trolley was going to kill one 10-year-old.

I have never seen the problem stated that starkly, but the Moral Machine Experiment did propose a variety of Trolley Problem (or Self-Driving Car Problem) questions to people around the world. In the question about saving an elderly vs. young person, the average answer was roughly evenly split between the two. What’s really interesting is that the result varied a lot by country. In France and Greece, there was a strong preference for saving the young. In China and Taiwan, more people wanted to save the elderly. The United States is about evenly split.

The write-up suggests that “individualism” is perhaps the driving factor in the country differences. I’m not sure that’s exactly right (the US and UK are much more individualist than France, by common measures), but perhaps it’s approximately right. I’d be interested in a deeper probing of the differences across countries, but it does seem to be in line with what Caplan believed may other people would say: lives are roughly equally valued. Of course, Caplan disagrees with this.

So what do we make of all this? Both in terms of what people say in the Moral Machine Experiment test and what they reveal through their willingness-to-pay, the lives of the young and old are valued roughly equally (and based on how the Moral Machine works, it seems unlikely that Social Desirability Bias is driving the result).

While what people say and what they pay don’t always nicely align, when they do align it seems to me that an economist should probably believe people over their own intuitions.

5 thoughts on “The Value of Life, Again

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