Many people say that human life is priceless. And yet, in the pandemic context current, the value of our lives is calculated for decision-making regarding health measures.
Estimating the value of life: a practice that did not wait for the coronavirus
Everyone will have noticed: sanitary measures weaken the economy. But how far are we ready to go? In order to find out, economists calculate the cost of human life. As the British daily explains The Guardian in an article from February 14, 2021, practicing this kind of operation is not new. One example is the evaluation of compensation following a plane crash or the costs of a new treatment.
Two principles give shape to this type of assessment: the value of prevented fatality (VPF) and the quality-adjusted life year index (QALY). VPF provides the maximum acceptable price to pay in order to avoid deaths in a population. The QALY index establishes a monetary value of a year of life in perfect health from an individual point of view.
Moreover, if the VPF is rather homogeneous, the QALY index varies from country to country. In 2016, this index was around 50,000 euros in Sweden and nearly 125,000 euros in the United States. In France, it does not exist, but if necessary, it would be between 150,000 and 200,000 euros depending on a study published in May 2020.
“Hidden costs” not taken into account
In times of pandemic like now, these kinds of clues can be useful. This can help determine which part of the population should be vaccinated in priority. Should the elderly (the most at risk) or the young (the most productive) be vaccinated? Regarding the containment measures, the case is becoming more complex. In a publication January 21, 2021, IFRAP estimated that a week of confinement costs between 4 and 16 billion euros to public finances. In short, eight weeks of confinement can cost up to 128 billion euros, or 185,507 euros per person saved.
Obviously, this kind of calculation does not include what are called “hidden costs”. It can be psychological damage, capable of causing people to lose their productivity. Another example is the impact on youth employment, due to a decline in the quality of training and lower wages.
Interviewed by The Guardian, economist Julian Jessop recalled that it is not always good to put a price on human existence. According to him, making a decision based on purely rational approach is not always the right choice to make. He gives the example of the former British Prime Minister Winston Churchill (1874-1965): “Imagine if Churchill had used this strategy to decide to go to war against the Nazi regime in order to save lives in the short term.”