New Episode of Resources Radio: The Value of a Statistical Life and Coronavirus, with Alan Krupnick
WASHINGTON, DC—Resources for the Future (RFF) today released a new installment of Resources Radio: “The Value of a Statistical Life and Coronavirus, with Alan Krupnick.”
In this episode, host Daniel Raimi talks with Alan Krupnick, an RFF senior fellow and an expert on the “value of a statistical life” (VSL), a metric that attempts to place an economic value on what people will pay to reduce their risk of dying. Krupnick discusses the origins of VSL, different approaches for estimating it, and persistently vexing moral quandaries that make the whole concept controversial. As COVID-19 threatens human life and destabilizes the global economy, the VSL has reentered the public conversation, but Krupnick ultimately contends that the concept is ill suited for discussions about ideal policy responses to the virus (at least for now).
Notable quotes from the podcast:
- The origins of the “value of a statistical life” (VSL) concept: “[Thomas Schelling] made the crucial distinction between valuing a life and valuing a reduction in the risk of dying. That’s where [VSL] started … It’s not the value of saving a life; it’s the value of reducing your risk of death by a little bit. How much are you willing to pay for those slight reductions to your risk of dying prematurely?” (7:39)
- One of many moral dilemmas associated with VSL: “You want to be clear with people that if they do pay this amount that they're telling you, that they're going to have less money to spend on other things. So you will get lower willingness-to-pay values in developing countries than developed. That's a fact. So the question is, in your cost-benefit analyses where you're comparing interventions in various countries, do you use a lower value of statistical life in those countries and in those developing countries?” (21:55)
- Why VSL might not be appropriate for today’s pandemic: “My overarching feeling on this is the cost-benefit analysis at this particular time of this particular choice is inappropriate, and that means that the VSL is inappropriate to even use. The reason for that is because there's not a trade-off. Economics is the science of trade-offs in society ... Until we get into that flattening of the curve that everyone's talking about, the economy just cannot get started again. Even if all these restrictions were lifted, no one would go back to work. So it's not a trade-off.” (24:27)
Resources Radio is a weekly podcast series exploring timely environmental, energy, and natural resources topics. Episodes can be found on Apple Podcasts, Google Play, Soundcloud, Spotify, and Stitcher.
Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.
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