There are good reasons why public policy discussions often
revolve around the benefits and costs of alternative policies. Discussions that
begin with the consideration of rights often require participants to
acknowledge conflicting rights and to weigh up consequences in a search for the
principles that can most appropriately be applied.
For example, consider what followed when I suggested
recently in a discussion of the merits of lockdowns to counter the spread of
COVID19 that such policies should be assessed against the principle that individuals have a right to direct their own flourishing,
provided they do not interfere with the similar rights of other people. The
latter part of that assertion implies a willingness to consider whether
infected people who spread disease are interfering with the rights of others. At
an early stage of the discussion, I acknowledged that it would be a step too
far to insist that everyone has the right to recklessly endanger the lives of
others. I argued that there should nevertheless be a presumption in favour of
freedom, and that those who advocate restriction of freedom should be required
to demonstrate that the benefits clearly exceed the costs.
That illustrates how the discussion of benefits and costs tends
to rule the roost in civilized discussions of public policy. An exchange of different
views about rights can be enlightening, but endless repetition of conflicting assertions
about rights does not qualify as civilized discussion in my view.
A WELLBY (or Wellbeing Year) is equal to a one-point
increment on a 10-point life satisfaction scale. If you assessed your level of
life satisfaction as 8/10 in 2019 and 7/10 in 2020, that would be a decline of one
WELLBY.
I began thinking about the WELLBY concept while considering
how it is possible to measure the costs and benefits of lockdowns, but in this
article, I will focus on the usefulness of that concept rather than on the
question of whether benefits of lockdowns could ever exceed the associated costs.
Assessing the psychological cost of lockdowns
period to March 2021. On that basis, Paul Frijters, Gigi Foster, and Michael Baker estimate that lockdowns cause loss of life satisfaction to the general public in the U.K. of 41,667 WELLBYs per million citizens for each month of lockdown. This estimate is in Chapter 5 of their book, The Great Covid Panic, 2021.
I think that is an appropriate use of the
WELLBY concept. If anyone knows of a better way to assess the psychological
costs of lockdowns, I would be interested to know what it is.
Frijters, Foster, and Baker incorporate
several other items in their assessment of the costs of lockdowns. I will
consider one of those later, but I want to turn now to use of the WELLBY
concept in the assessment of the main hypothetical benefit of lockdowns, namely
lives potentially saved.
Assessing the value of a life saved
Richard Layard and Ekaterina Oparina have
published a provocative article using a WELLBY approach to assess the monetary
value of preventing the loss of one year of human life (Chapter 8 of World
Happiness Report, 2021).
Layard and Oparina begin their discussion by observing that the
average WELLBY is 7.5 in advanced countries. On that basis, they claim that
preventing the loss of one year of the life of one person saves 7.5 WELLBYs.
The authors draw upon information on the relationship
between income and life satisfaction in order to assess the monetary value of
that loss. After some discussion of relevant research, they suggest that a
coefficient of 0.3 is an appropriate measure of the impact on life satisfaction
of a unit change in absolute log income. With average income of $30, 000, the
loss of $1 is equivalent to 1/100,000 WELLBYs (0.3/30,000). It follows, they
suggest, that “we” should be willing to pay up to around $750, 000 to save a
year of life (7.5 WELLBYs).
Layard and Oparina point out that the $750, 000 would be
shared over the whole population. Nevertheless, it still seems an extremely
large sum to pay to prolong a life by just one year.
One possible source of error is that life may have no value
for people with very low life satisfaction, for example those with a rating less
than 2/10. If you assume that a life year is equivalent to 5.5 WELLBYs (7.5
minus 2.0), the estimated sum that “we” should be willing to pay to prolong
life by one year is reduced to $550, 000. That still seems implausibly high.
The estimate could be further reduced by taking account of
the fact that the people who are most vulnerable to COVID19 often have
pre-existing ailments that would tend to reduce their life satisfaction, and
many of those in nursing homes would be unlikely to live another year in any
case.
However, let us return to the question of whether $550,000
is a plausible estimate of what “we” should be prepared to pay to prolong by
one year the life of a person with an average life satisfaction rating. An
alternative way to approach the issue of determining the monetary value of a
year of life is to consider estimates of the impact of changes in healthy life
expectancy on average life satisfaction. Regression analysis suggests that the
addition of one year to healthy life expectancy adds only 0.033 to average life
satisfaction (Table 2.1, World Happiness Report, 2019). The income loss
providing an equivalent loss of life satisfaction is only $3,300
(0.033*100,000). That strikes me as an implausibly low estimate of the value of
a year of life.
My view of what is a plausible estimate of the value of one
year of life is not based solely on my own gut feelings. The assumed value of a
life year in cost-benefit analysis typically ranges from $50, 000 to $250, 000.
Those assumptions are based on surveys asking people how much they would be willing
to pay to extend their lives and estimates of amounts people need to be paid to
accept jobs involving greater risks to life.
Estimates of the value of a year of life within that range
seem to be broadly consistent with community expectations. Some groups may
lobby for lives to be valued more highly in assessing whether life-saving drugs
should be subsidized by governments. However, I don’t see large numbers of people
suggesting that they would be willing to pay higher taxes to fund that.
There seems to me to be a fundamental problem in attempting
to assess the value of a life-year from the relationship between average income
and average WELLBYs. As I explain in Freedom,
Progress, and Human Flourishing, psychological well-being is just one
of the basic goods of a flourishing human. When you ask individuals open-ended
questions about how they are faring, their responses are not confined to the
extent that they are “satisfied” with life. They are likely to talk about
whether they are achieving their aspirations, the state of their health and their
personal relationships. If you ask a person who already has high life
satisfaction why they aspire to earn a higher income, they are not likely
to claim that they expect a higher income to enable them to become more satisfied
with their own life. They are more likely to say that they want to put some
money aside for various reasons, for example to assist with education of
children or grandchildren, or to have something to fall back on in the event of
illness.
If an individual is faced with a decision about whether to
use accumulated wealth (or to mortgage their house) to purchase an expensive
drug that might prolong their life for a year, the quality of that extended life
(WELBYs) is not the only factor that they are likely to consider. The choice
they make may well give consideration to their desire to improve opportunities available
to the next generation of their family. There is an intergenerational choice involved
in placing a value on an additional year of life.
What value should be placed on the lives of potential humans?
Frijters, Foster, and Baker include
among the costs of lockdown the shutting down of the in-vitro fertilization (IVF)
program during lockdowns in the UK because it was deemed to be a nonessential
service. This resulted in about 30 fewer IVF births per million citizens per
month of lockdown.
The cost of disruption of the IVF program is not critical to
the authors’ conclusion that the cost of lockdowns exceed the benefits. Nevertheless,
in my view there is a strong case for it to be taken into account. Potential
parents clearly place a high value on the new lives that the program makes
possible.
However, the methodology which Frijters, Foster, and Baker use
to estimate the cost of disruption of the IVF program is a straightforward
application of the WELBY concept to value lives. They calculate that each of
these potential humans could be expected to enjoy 480 WELLBYs during his or her
life – each is assumed to have a value equal to 6 WELLBYs and to live on
average for 80 years. With the loss of 30 IVF babies per month, that amounts to
the loss of 14,400 WELLBYs worth of human well-being per month per million
citizens.
The reasoning is impeccable if you accept the utilitarian
assumptions associated with use of the WELLBY concept to measure the value of a
human life. Within that framework, if government policies prevent potential
humans from being born, that diminishes the sum of human happiness by the amount
of happiness they would have enjoyed during their lifetimes.
I have already indicated that I don’t accept that people
value their own lives exclusively on the basis of WELLBYs. However, if I have
not yet persuaded you to reject the WELLBY approach to evaluation of lives, you
may wish to consider the following possible outcome of applying that approach.
Let us suppose that a government is considering a ban on all
forms of contraception and seeks the services of some utilitarian advocates of
maximization of human happiness to evaluate the costs and benefits of the
proposal. It seems reasonable to predict that the utilitarians would conclude
that the additional births resulting from the policy change would result in a
large net increase in WELLBYs, and therefore an increase in the sum of human
happiness. The more, the merrier they might say!
Conclusions
The WELLBY concept has a useful role to play in evaluation
of some policies that have an impact on psychological well-being.
However, the valuation of lives according to the number of
WELLBYs individuals might enjoy seems to be at variance with the approach that individuals
take in making choices in relation to extension of their own lives. That
approach to valuing lives is widely at variance with the approach most people in
advanced countries adopt in considering the value of potential lives of the many
additional humans that they could bring into the world if they felt inclined to
do so. It counts the lives of potential people as having equal value to the
lives of the living.
The WELLBY approach to valuation of human life should be
rejected.
Postscript
A survey
conducted by UBS has provided relevant information on the proportion of
wealth that investors are willing to sacrifice for additional years of life. The
survey covered 5,000 wealthy investors in 10 countries. On average, those with financial
wealth in the $1 to $2 million range indicated that they were willing to give
up 32% of their wealth for an additional decade of healthy living. That may
seem a lot, but amounts to only $32,000 to $64,000 per annum when spread over
10 years.
Those figures are far lower than the $750,000 (discussed above) that an application of the WELLBY approach to life evaluation has suggested that “we” should be willing to pay to save a year of life.
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