How much is a human being worth? The price can vary from $30,000 for an inactive senior citizen to $15 million for a business leader and head of a family. With a good lawyer, the value can be pushed as high as $50 million! Human life does have a price. “Even if the idea of assigning an economic value to human life may appear unacceptable from a moral point of view, it is done every day in formulating health, population and transportation policy,” says Fernand Martin, Professor in the Economics Department at Université de Montréal.

An economist known for his studies of municipal mergers and economic development of the South Shore of Montréal, Mr. Martin, at the request of the Québec Ministry of Transport, began to look into methods used to justify the redesign of highways where serious accidents have occurred. Since these costs depend on human lives lost and injuries, it became necessary to determine the economic value of a life. Each death, each injury, has a cost. Based on cost-benefit studies, Transport Canada uses the following values: $2.5M for a death, $66,000 for a serious injury and $25,000 for a slight injury. “But is it profitable to do public works that cost society millions of dollars and will only result in saving one or two lives a year?” The researcher asks. “That depends on the economic value of the individuals who can potentially be saved.”

Some people contribute to progress or economic growth by leaving an inheritance, he explains. “They may be outstanding businessmen, scientists or artists. When their possessions become public, they represent a legacy for society: for example, copyright or financial benefit from innovations.” However, the economic value of an ordinary citizen might not be very much compared to a Mozart or an Einstein, say: their accomplishments have a significant impact after their death. “This does not mean that we feel no compassion when an anonymous person is crushed by a reckless driver,” Mr. Martin insists. “But from the economic point of view, it is not true that all men are created equal.”

But how do you assess the price of a human life? We can distinguish two methods: the “human capital” method, and the method based on “disposition to pay” to avoid damage, says the economist. “The first method consists in estimating damage on the basis of economic impact, i.e., after production losses, the cost of health care and material costs. The drawback is that you cannot measure exactly what you are looking for, namely, the intrinsic value of damage when there is a death or suffering due to serious injury.”

Researcher: Fernand Martin
Telephone: (514) 343-7216
Web site: www.fas.umontreal.ca/sceco/dept/profs/marf.html
Funding: Québec Ministry of Transport