Value of Life and estimating the human cost of Iraq war

We often hear that life is precious. But how precious? Can we really try to ascribe cold monetary values to a warm life? When you don’t consciously estimate, you run the risk of underestimating it. Every living moment we take chances: it’s unsafe to eat, it’s unsafe to work, it’s unsafe to drive. And whenever we trade risk of death off for time or money, we reveal the value we ascribe to our own life. And with this, we can also contemplate about the cost of economic disasters, and measure them in human life.

Here is a chart by Johannes Ruf (using a bibliography prepared by Bernhard Ganglmair), listing a number of papers that list the value of life as estimated by such trade-offs – here L and U are lower and upper bounds on the value of life measured in millions of dollars.

So, allowing some tolerance for inflation and deflation, and taking the average of all of the above, we arrive to about 4 million dollars. If we assume that the average life expectancy is 78 years, and that half of the day is waking time, the value comes down to about $12 for a waking hour of life – arbitrary, but the right order of magnitude. Additional complexity can be entered into this model to improve it.

I will now address what we can do with these numbers.

Bilmes and Stiglitz estimate cost of the Iraq war to 3 trillion, while the US military casualties currently number 4250. So, the cost of lives lost is 17 billion, but the economic cost borne by the United States is 3 trillion. What is the true cost of the Iraq war in human lives? 3 trillion divided by 4.2 million comes down to over 720,000 lives. This is the true casualty count, which accounts for people having to work on stuff that explodes instead of spending time with their families. On the Iraqi side, there were about 100,000 civilian lives lost, but it’s hard to estimate the full cost of war to Iraq – the Lancet study claims numbers considerably larger than this.

Andrew Gelman has also written about this – when is one’s risk of radon to health sufficient to justify the cost of measurement or remediation. I’d again like to acknowledge Johannes and Bernhard’s help with the research, but all flaws are solely my own. The difficulties of estimation shouldn’t stop us from studying the problem – maybe better awareness of this will help save a million lives in the future.