The Cost of the Outlier

                             

                           The Cost of the Outlier




One of the problems in modern life is our inability to face things squarely. This is probably a good thing; the terrible inevitable outcome of life might otherwise paralyze us, the risks of daily living send us to the basement. But the hard questions are beginning to become elephant-in-the room-like. The East Germans solved the problem of drunk driving years ago this way: If you tested positive for any alcohol on blood test initiated by a breathalyzer, the State took the car you were driving. There was no appeal. 
The basic question seems to be this: To what lengths will we go to deal with the outlier?

This is from a 538 article:

https://fivethirtyeight.com/features/what-should-the-government-spend-to-save-a-life/




New York Gov. Andrew Cuomo dismissed Trump’s push to get the economy moving again, saying, “No American is going to say, ‘accelerate the economy at the cost of human life.’ Because no American is going to say how much a life is worth.”

Cuomo’s sentiment might be a nice bit of political rhetoric, but it’s not really true. Economists might not be able to say how much an individual person’s existence is worth, but they have figured out a way to calculate how much the average person is willing to pay to reduce the risk of death — which allows them to put a price tag on the collective value of saving one life. That figure, which currently hovers somewhere around $9 or $10 million, is known as the “value of statistical life,” and it’s the basis for all kinds of high-stakes decisions that involve tradeoffs between public safety and economic cost — from food and automobile regulations to our responses to climate change.

As cold-blooded as it might seem, several economists told me that, at least in theory, a pandemic is exactly the kind of situation this metric is designed to help with. “Essentially, we’re trying to figure out what our society is willing to pay to reduce the risk of mortality,” said W. Kip Viscusi, an economist at Vanderbilt University and one of the leading experts on these calculations. “In that sense, a pandemic isn’t so different from a terrorist attack or a pollutant that’s threatening to kill large numbers of people — it’s just happening very quickly and on a very large scale.”