Micromorts

When public stupidity is the constraint, you can either rail against the stupidity, or route around it. And Tim Harford finds a nice hack around public repugnance at putting a value on human life.

Instead of talking about the value of a statistical life, which still puts people off, talk about micromorts: a one-in-a-million chance of dying. If the value of a statistical life is $7 million, a micromort costs about $7. In New Zealand, the Ministry of Transport uses a $4.2 million figure, so a micromort here costs $4.20.

Here's Harford:

Sir David Spiegelhalter, my favourite risk communication expert, reckons that going under general anaesthetic is 10 micromorts. Travelling 28 miles on a motorbike is four micromorts; cycling the same distance is just over one micromort. The National Health Service in the UK uses analysis that prices a microlife at around £1.70; the UK Department for Transport will spend £1.60 to prevent a micromort. In a world where life-and-death trade-offs must be made, and should be faced squarely, this is a less horrible way to think about it all. A human life is a special thing; a microlife, not so much.

As Ronald Howard, the decision analysis expert who invented the micromort, put it back in 1984: “Although this change is cosmetic only, we should remember the size of the cosmetic industry.”

It's also a more accurate way of framing things. Since reasonable VSL measures derive from willingness-to-pay measures for risk reductions around small risks, we're really talking in millimort or micromort space to begin with. The scaling up makes things easier for economists; scaling down makes it instead politically palatable.