This is a linkpost for https://medium.com/@benfinn/coronavirus-how-much-is-a-life-worth-854570873153
A summary (for a general audience) of how to put an economic value on life, in dollars or QALYs. While many EAs will already know about that, I also do a rough estimate of potential coronavirus impact in WALYs (well-being adjusted life years), as happiness economics might do.
This suggests that if a global recession like the last one results, it would be far worse than the millions of deaths forecast.
Hello Ben. Thanks for writing this up and showing how the value of outcomes can be compared using surveyed well-being data.
I've been thinking on somewhat similar lines about how to check if the medicine might be worse than the disease.
Your analysis doesn't get as far as telling us if governments' policies are the right ones (note: this is not a criticism - I didn't take you to be trying to address this issue).
You observe that COVID has some negative economic consequences, and if we make such and such assumptions, those economic consequences are worse (in terms of well-being) than the immediate health consequences.
To work out if govts are choosing the right policies, we need a counterfactual comparison between (1) what would happen on the basis of one policy, e.g. no 'suppression' (shutting down of businesses, movement restrictions, etc.) and (2) some other policy, e.g. suppression. Presumably COVID19 will have some negative economic consequences; the question is whether various strategies that save lives now at a cost of the economy are better overall than those that save fewer lives now but keep the economy stronger.
I think a neater way to get a handle on this action-guiding question is to realise that a smaller economy means there is less (public and private money) available to fund life-saving health services later, and to run the numbers making a comparison in terms of years of life (as opposed to comparing quality vs quantity of life, which is what your analysis does and is less apples-to-apples). Paul Frijters, a health economics prof at LSE who works on well-being, has two articles looking at this.
I think he's overlooked a couple of things is his calculations and I'm working up my own numbers (which may well end up telling the same story).
An in-the-weeds methodological point: your analysis is arguably quite conservative because of where you place the 'neutral point' equivalent to non-existence is on a 0-10 life satisfaction scale. You say
This counts 0/10 as equivalent on non-existence, i.e. it is not possible for respondents to say that their lives are worse than death.
It's unclear where the put the neutral point - an issue I flag in my D. Phil thesis and is noted in the Happier Lives Institute's Research Agenda. The other obvious place to put it is 5/10, on which the WALYs lost per death would be 0.07 (4.5 years x 0.17 per year / 10), rather than 2.33 and the value of saving lives would be smaller than the well-being value of the economic loss.
As a point about sensitivity then, the further from 0/10 the neutral point is, the easier it is for the conclusion you reach to be the case.
Indeed, though if working from existing 0-10 life satisfaction scores I don't think it's plausible that those who responded below 5/10 thought they'd be better off dead. (Maybe those responding below say 2/10 would.) Otherwise suicide rates would be far higher.
(But indeed some kind of calibration of death and worse-than-death states is needed more generally. E.g. it concerns me that almost all the bad in the world may be located in extreme pain that is hugely underweighted, and so almost all efforts to improve the world may be missing the point.)
Suicide is a very poor indicator of the dead/neutral point, for a host of reasons.
A few small, preliminary surveys I've seen place it around 2/10, though it ranges from about 0.5 to 6 depending on whom and how you ask.
(I share your concerns in parentheses, and am doing some work along these lines - it's been sidelined in part due to covid projects.)
OK, well reworking the numbers with a 2/10 neutral point (and Imperial's latest figures as noted below):
Death is now a fall from 5.17 to 2 points, i.e. by 3.17 points, though presumably out of 8 not 10 as we've compressed our scale. So 4.5 years = 4.5 x 3.17/8 = 1.78 WALYs lost. So 1.9 to 24 million deaths = 3.4 to 43 WALYs lost.
Presumably the WALYs lost by the financial crisis is also out of 8 not 10, i.e. 0.2/8 per person = 194 million WALYs. Which is 4.5 to 57 times worse than the deaths.
Thanks for this. (I hope my summary of value of life was mostly right!)
Yes I haven't really given any thought to what the best way of handling the situation would be, or would have been. Clearly complex given that there are sociological/political constraints too (e.g. how would the public react if x% of them die in a new dramatic way - as contrast with, die routinely from seasonal flu or traffic accidents).
It seems to me a global recession could reduce income/employment & hence quality of life without having much effect on life expectancy. For I'm not sure the last recession had much or any identifiable effect on it; growth in life expectancy has slowed since 2008/9, and I asked Paul F about this in a comment below one of his recent articles (which I have indeed been following), but he attributes it to other things. So I wonder if only looking at saving lives is going to miss most of the damage.
I think Paul F is effectively combining quality with quantity of life in his dollar numbers, and converting to whole lives lost as a convenient way to express it, but not completely sure. After all, dollars can be spent on quality or quantity of life.
I look forward to reading your analysis in due course!
Yes, good point. Now inclined to think your and Paul F's analyses need to be combined in some way, not immediately clear to me how.
He is indeed converting money into quality and quality of health, not just quantity, my mistake.
I've just updated the figures (in footnote 7) using Imperial College's latest global forecast of deaths. Previously a global recession like the last one came out as about 1 to 4 times as bad as pandemic deaths (in terms of impact on well-being); now it is 2.8-35 times as bad.
Yeah, the value of QALY is about 100% of GDP per capita in an advanced economy (Huang et al.) and 1%-59% in developing countries (Woods et al.).
Woods thus implies one can purchase quality lives in some of the poorest economies for as little as $3 per QALY * 60 years of life = $180.
Valuing all persons equally, this is such a great deal?
I'm not an expert, but I assume (from a glance at the second paper) this is because the 1%-59% is a cost (opportunity cost), not a value of a life year as such; i.e. in a very poor country you can extend a life by a year for as little as $3, maybe with a vaccine or micronutrient supplement. Actually that seems an order of magnitude too low to me; but nonetheless, it's a great deal!
Hm. It may be both - the opportunity cost (if one loses one QALY, they lose some percentage of annual income) and the value it costs to extend life for one QALY (e. g. through vaccine or micronutrient supplementation).
I actually dread it is the opportunity cost only, to which healthcare intervention costs are compared. For example, if an additional farmer contributes only $3 per year, because their work can be done by family members, then a global health organization will not support that farmer's health if it costs more than $3 per QALY.