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Human life is priceless. But this has not stopped economists trying to put a financial value on it. One reason is to help firms and policymakers to make better decisions on how much to spend on costly safety measures designed to reduce the loss of life. Another is to help insurers and courts judge how much compensation to pay in the event of, say, a fatal accident. One way to value a life is to calculate a person’s human capital by working out how much he or she would earn were they to survive to a ripe old age. This could result in very different sums being paid to victims of the same accident. After an air crash, probably more money would go to the family of a first-class passenger than to that of someone flying economy. This may not seem fair. Nor would using this method to decide what to spend on safety measures, as it would mean much higher expenditure on avoiding the death of, say, an investment banker than on saving the life of a teacher or coal miner. It would also imply spending more on safety measures for young people and being positively reckless with the lives of retired people. Another approach is to analyze the risks that people are voluntarily willing to take, and how much they require to be paid for taking them. Taking into account differences in wages for high death-risk and low death-risk jobs, and allowing for differences in education, experience, and so on, it is possible to calculate roughly what value people put on their own lives. In industrialized countries, most studies using this method come up with a value of $5m–10m.
- نوع المصطلح: اسم
- المرادف (المرادفات)
- مسرد المصطلحات
- المجال / النطاق: الاقتصاد
- الفئة: علم الاقتصاد
- Company: The Economist
- المنتج:
- الاختصار-المختصر:
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