Matthew Parris almost gets this right. He’s talking about the price of a life, something we’ve got to take note of. Because, as we all know, economics tells us there are no solutions, there are only trade offs. Given that this is so we must be able to value the various things that go into the varied trade offs.
We convert all of those values to cash not because a life is actually worth cash. Nor because an unobstructed view of the South Downs is and so on. Rather, the conversion is so that we can do sums.
So, lockdown saves some number of lives at the cost of some amount of economy. And some amount of economy kills off lives by not having medical treatment, or food, or housing and so on. All of this is true and he’s quite right.
It’s this little bit that’s not quite right:
That, however, is not always how we act. Deep down, we know we can’t. The National Institute for Health and Care Excellence (Nice) uses quality adjusted life-years (Qalys) to compare the worth of medical procedures, treatments and drugs. One Qaly equals one year of perfect health (or two years of 50 per cent health, and so on). The NHS is said to regard a £30,000 Qaly as the upper limit for good value for money. Various government agencies use the value of a prevented fatality (VPF) to cost human life at £1.8 million per life saved.
NICE is simply an invented number. They’ve determined what we’re worth – how nice of them. But the £1.8 million, while it is indeed the number often used, isn’t a determination by the bureaucrats. Rather, it’s what we value a life at.
The method used is to look at what people actually do. That is, revealed preferences, not what people say of expressed preferences. How much are we willing to pay for a car that is a bit safer? How much jaywalking do we do, how much crossing only when the light says so? What can we find out about how we value the risk of death by watching what we do?
From that we can then calculate up that, on average, we ted to value a life at that £1.8 million. So, spending that to save a life is justified, spending more than that isn’t.
The point here being that it’s not really a determination of what a life is worth, it’s a calculation of what we all, on average, think a life is worth.