"You can't put a price on a human life." It's a fine principle, and morally we hold on to it. Yet every day, governments decide whether to install a crash barrier, fund a medicine or tighten a pollution standard. And to decide, they use… a price for human life. In France, it is around €3 million. Here is where that figure comes from, and what it really means.
The problem: we can't do everything
Imagine a local authority with €10 million to spend. It could redesign a dangerous junction, replace the lighting on a main road or fund a prevention campaign. Each option may save lives, but not the same number, and there isn't enough money for all of them.
Refusing to put a value on life doesn't make the choice go away: it gets made anyway, just without saying so and without being able to compare. So economists looked for a consistent way to put a figure on what a society is willing to spend to prevent a death.
The old method: what you earn
The first approach, known as human capital, added up what a person would have earned over the rest of their life. It was used for a long time, especially to compensate victims' families.
Its flaws are obvious: the life of a retiree, a child or someone out of work is "worth" very little, and an executive far more than a factory worker. Hardly a sound basis for public policy.
Today's method: the "value of a statistical life"
In 1968, American economist Thomas Schelling (a future Nobel laureate) suggested changing the question. Instead of asking what someone's life is worth, we ask how much people are willing to pay to slightly reduce their risk of dying.
Here is an example. Suppose 100,000 people are each willing to pay €30 a year for a safety device that lowers their risk of death by 1 in 100,000. Statistically, the device will prevent one death per year in that group. And the group is willing to pay a total of 100,000 × 30 = €3 million for it. That is the value of a statistical life (VSL).
The word "statistical" is key: we're not talking about the life of an identified person, but about one anonymous death prevented in a large population. Nobody would agree to die for €3 million; but everyone makes small trade-offs between money and safety every day (paying more for a safer car, taking a riskier but better-paid job…). Economists measure these trade-offs through surveys and by looking at wages and prices.
How much, country by country?
- France: the Quinet report, published in 2013 by the government's strategy and planning office, set the VSL at €3 million (in 2010 euros), updated since in line with growth. It also suggests a value of about €115,000 per year of life gained.
- OECD: a 2012 report recommended a reference value for member countries of around $3 million (in 2005 dollars), within a range of $1.5 to $4.5 million.
- United States: federal agencies such as the Environmental Protection Agency and the Department of Transportation use values above $10 million.
These differences reflect different income levels and methodological choices, not a judgement on the worth of French or American people.
What is the figure used for?
It is used for cost-benefit analysis. If a road improvement costs €6 million and is expected to prevent three deaths over its lifetime, its benefits (€9 million) exceed its cost: it is justified. The value is used for transport infrastructure, road safety, environmental standards and risk prevention.
An important point: in France, the same value applies to everyone, regardless of the income, job or background of the people concerned. That is an ethical choice as much as an economic one.
What about healthcare?
In healthcare, the reasoning is usually in years of healthy life. In the United Kingdom, the body that assesses medicines (NICE) generally considers a treatment cost-effective if it costs less than £20,000 to £30,000 per year of healthy life gained. This threshold is regularly debated, especially for rare diseases and cancers.
When victims must be compensated
Courts and compensation funds, for their part, work case by case. After the attacks of 11 September 2001, the victim compensation fund run by lawyer Kenneth Feinberg partly based each award on lost earnings. Payments for a person who died ranged from about $250,000 to more than $7 million, with an average close to $2 million. Feinberg later acknowledged that paying the same amount for every victim would probably have been fairer.
So, how much are you worth?
In short:
- governments really do use a "value of a statistical life", around €3 million in France and over $10 million in the United States;
- it is not the price of a person, but what a society is willing to pay to prevent one anonymous death;
- it is used to choose between safety spending, and it is the same for everyone.
If you want a more personal (and far less serious) answer, Humain à vendre, a French-language site, asks you about fifty questions and hands you a price ticket, usually between €2 and €9 million. A range that, by pure coincidence, is not that far from the official figures. Which doesn't make it any more scientific.