Freakonomics Radio 344. Who Decides How Much a Life Is Worth?
Aug 9, 2018
Guest is a man who’s allocated compensation money to victims of tragedies. The podcast discusses the challenges of assigning a dollar value to victims, exploring emotional impact, complexities of valuing life, and issues faced in distributing compensation.
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Five Questions That Define A Fund
- Feinberg outlines five core questions to design a compensation program: initiator, money, eligibility, methodology, proof, and hearings.
- These questions determine fairness and feasibility before any payments are calculated.
Wait For Emotions To Dampen
- Delay implementing compensation programs when possible to allow emotions to settle and improve administration.
- Feinberg prefers later engagement because emotional trauma hinders program success.
How Economists Price A Life
- Economists use the Value of Statistical Life (VSL) to price mortality risk; Viscusi estimates roughly $10 million per life from wage-risk tradeoffs.
- VSL captures society's willingness to pay to prevent one expected death, not an intrinsic moral price.