Economic essay

COVID-19 Optional Assignment Ryder Burliss 3034079559 Word Count My Essay: 1511 Word Count Peer Review 1: XXX Prompt 4: VSL

COVID-19: The Value Of A Life

The current Pandemic, Covid-19 has affected everyone around the globe. Thankfully, our

medical staff, doctors and nurses are working tirelessly day and night to fight back against the

virus as it threatens thousands of lives and claims hundreds, everyday. But the fact is, not

everyone can be saved. Our health heros are being faced with an unethical decision, who gets

treatment and hopefully survives, and who doesn’t, leaving their lives at the mercy of the virus.

As the crisis continues, during a press conference, New York Governor, ​Andrew Cuomo

states​, “You cannot put a value on human life.” However, in order to make decisions on how

many resources are spent and distributed to reduce mortality risks and death, conventional

estimates of the Value of Statistical Life, or VSL are used. The VSL can be defined as how much

of your income you would pay, or economically speaking one's (Willingness To Pay, WTP) to

reduce your risk and avoid fatality. The​ VSL​ is commonly used in cost-benefit analysis when

comparing positive and negative aspects of a particular policy. ​Graphically​, this can be shown as

the slope along an indifference curve showing different bundles that the consumer is indifferent

to choosing because the same utility is maintained at each point along the curve.

In this pandemic, although it is unethical in normal circumstances, I argue that the VSL

of younger people is much higher than the elderly’s. One's willingness to pay to avoid risking

death depends primarily on age combined with one’s vulnerability to diseases and whether or not

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one has health complications that would make them more susceptible to having complications

with the virus such as asthma. With this being said, VSL in this pandemic is also influenced by

an individual's personal wealth which would undoubtedly affect their WTP for survival.

The Value of Statistical Life, as discussed in lecture is a hedonic analysis where the

amenity is the risk of death. Although hedonic analysis is a revealed preference method,

environmental economist ​Alan Krupnick ​ claims that two ​methodical approaches​ to calculate

VSL are revealed preferences, which is a monetary tradeoff, and stated preferences which is a

more hypothetical method. Revealed preference methods include observations and statistical

analysis which differs from stated preferences that include surveys and questions rather than

money to elicit people’s preferences regarding their WTP to reduce risk of death. As a branch of

revealed preference methods, hedonic wage analysis leans towards the human capital approach

to VSL and does not necessarily poll the group that is not working, leaving them at a higher risk.

This coincides with the coronavirus pandemic because those not working include most of the

elderly population who are also at a higher risk to catch the virus and not survive. During this

pandemic the VSL of older people in comparison to younger people proves to be lower as

younger people are given medical attention.

However, ​Alan Krupnick argues​ that VSL is an inappropriate term used in this pandemic

because there aren’t clear society-wide trade-offs. However, there are trade-offs but they are

certainly morally fraught. Such as, the ​Lieutenant Governor of Texas states​ he would be willing

to give up his life for his grandchildren’s future economic benefit and also suggests many others

would be too. I argue against Alan Krupnick that the VSL is a necessary term used during this

crisis in order to appropriately allocate limiting resources. Also, I argue there are in fact society-

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wide tradeoffs such as those essential workers on the front lines risking contracting the virus by

doing their job to help the community, as well as medical workers having to choose whom to

save based on who has more life in them which certainly affects society as a whole.

In attempting to place an economic value on one's willingness to pay for life, moral

quandaries are being disputed by governments in every country. As every country handles this

pandemic differently, we are all human and deciding who should be saved and who should not is

unethical but necessary in these harrowing times. ​Reports ​from Belgium include a ninety year

old woman, Suzanne Holylaerts who was first admitted to the hospital for lack of appetite and

shortness of breath. Later she was diagnosed with the novel coronavirus. While in isolation,

Suzanne told the doctors, “I don’t want artificial respiration. Save it for younger patients. I

already had a good life.”. On March 22 Suzanne died, sacrificing her life for those who are

younger. She deliberately chose a lower VSL in comparison to those who are younger.

In other countries such as Italy, older people weren’t given the choice to value younger

lives as more important than their own and the decision had to be made by doctors. During this

profoundly grim time in Italy and other countries, ​doctors are advised​ to focus their care on

younger patients who are more likely to survive while the older, sicker patients are left to die.

Conventional estimates of the VSL are used here to decide that the limited resources of medical

attention is distributed to the younger patients with higher resilience and potential for survival.

With medical attention being a primary limiting resource in this spiraling crisis of the

virus, having it allocated to those with lower risk of complications supports my claim that VSL is

higher for those who are younger and stronger. While, the older more susceptible patients during

this crisis are given a lower VSL without a choice as medical professionals are being asked to

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prioritize their care to more adolescents, because as grimly as it sounds, they have a much higher

chance of survival.

Economists and ​analysts​ have started asking a studded question with moral and ethical

landmines about how much economic decline can we withstand as a country in order to protect

public health .As this question attempts to be answered, a VSL must be consulted. The value of

statistical life of doctors and other medical staff on the frontlines of the epidemic, risking their

lives to save others I would assume to be quite low. I would argue the VSL of our medical

professionals at this time is similar to men and women joining the army because they are

deliberately choosing to risk their lives for others.

As Trump nearly threatens to open the economy up rather than prioritizing public health,

healthcare workers could take the brunt of this decision. Statistician and health economist,

Howard Steven Friedman, tells us​ that this dilemma involves divulging a price-tag for a human

life, a VSL. The development of this price-tag is influenced by human rights, economics,

philosophy, law, science. The numerical value says a lot about what is prioritized in our country.

Also impacting the wellbeing of our healthcare workers are government regulations that have

been put in to keep society safe and limit the decisions of who gets to survive.

Although citizens continue to fight government restrictions, such as social distancing and

the stay-at-home order, society as a whole feels the repercussions. Countless ​posts ​on social

media and in the news picture doctors with masks, goggles, holding up signs in gloved hands that

say “We stay here for you. Stay home for us”. There have even been protests such as in Colorado

of people claiming their independence is being taken as government restrictions remain and

strength amidst the chaos of the outbreak.

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Although government restrictions have taken a toll on civil liberties that we Americans

stand for, I argue it is wildly rational considering those who are putting their lives on the line to

save us. Many writers and journalists are comparing these grim times to war times as our rights

are limited. Obtaining food becomes a stressor and involves risk, anxiety overwhelms the nation

as well as on a global scale. Unfortunately, President Trump continues to make poor decisions

such as continually calling the pandemic the “Chinese virus” which encourages racism against

Asian citizens.

Poor decisions may even be made in the hospitals as Ziod Obermyer, acting Associate

Professor of Health Policy and Management at University Of California Berkeley, suggests.

Obermeyer mentions in a ​Berkeley Conversation ​that there are pitfalls in using numerical data

and algorithms in the allocation of healthcare resources during the COVID-19 pandemic.

Obermeyer suggests that as limited health resources are allocated towards the younger, healthier

patients who are more likely to survive, not only promotes disparities, but may not be the

smartest move. If they are more likely to survive, the resources such as respirators should be

allocated to those who need it the most.

Although disputes regarding the ethicality and appropriateness of the Value of Statistical

Life’s usage during the Covid-19, it is still being implemented. This is shown by essential

workers still going to work, potentially trading off their health and safety to benefit society, as

well as traumatic decisions being made in hospitals. The VSL is proven to be higher for younger,

stronger members of society in comparison to older, less healthy ones in the case of the

pandemic because they are the ones where the limited health resources are allocated.

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