DLC Blog

Economic Value of a Human Life – A New Model

Most economists calculate the value of a human life by examining how much an individual is willing to pay to reduce the risk of death. Dr. Allen Feldman of Brown University has a different theory; he believes the human capital model is “fraught with philosophical and empirical deficiencies” and prefers to calculate the value of a human life by asking individuals how much they would be willing to pay to extend their life for a finite period of time. Generally speaking, this amount is roughly equal to what that person would spend on personal consumption during that time; in other words, Feldman’s model takes into account how people enjoy their lives, something which the human capital model does not.

From the perspective of the courts, human lives are worth no more than their level of productivity, something which is calculated in dollars and cents: annual income. The implications of this are, in a word, controversial - the young are worth more than the old, the educated are worth more than the uneducated, the rich are worth more than the poor, etc. However, it’s important to realize that while "all men are created equal," there are unequal and disproportionate divisions between people, societies, and nations. Economists must consider these factors, among others, in their work.

For more information on Dr. Allen Feldman’s economic model, click here.

Posted by Ryan at March 15, 2005 11:19 AM in Math.