How much is a human life worth? Economists answer that question using market tools, namely how much do we pay, as a society, to avoid death. We clearly have bounds around how much we will and will not pay. For example, we spend a lot of money making cars safe. However, we don’t spent unlimited amounts. The amount we spend, combined with the probability of death, puts both an upper and lower bound on the value of a human life. In the US, we seem to value our lives at about $3 to $5 million.
Below is an example of a calculation you might do. Put your answer in the comments section.
You’re waiting to take the bus home after school when your neighbor drives up on his motorcycle and offers you a ride. He doesn’t have an extra helmet and you can smell whiskey on his breath, so you figure there’s a one in ten thousand chance that you’ll be killed if you accept the ride. On the other hand, if you go with him, you’ll save the $1 bus fare. You waver, but decide to go with him. What’s the most your life’s worth?