cost of living
”your money or your life.” the choice traditionally presented by the highwayman is supposed to have only one sensible answer. money is, after all, no use to a corpse. yet economists often study something rather like the highwayman's offer in an attempt to uncover the answer to an important question: how much is your life actually worth?
like many awkward questions, this is one that has to be answered. safety regulations save lives but also raise the cost of doing business, a cost we all pay through higher prices. are they worth it? our taxes pay for life-saving spending on road safety and fire fighting. are they high enough, or too high?
so how much are we willing to spend to save a life? a traditional planner's approach used to be to measure the value of wages lost due to death or injury. that's dreadful: it confuses what i think my life is worth with what my boss thinks my life is worth.