What Are 750,000 Senior COVID Deaths Worth?

• Author: Kniesner, Thomas J.

The United States has officially surpassed 1 million deaths from COVID-19, a shocking number that was unimaginable two years ago. Those aged 65 or older account for about 750,000 of those deaths. This age distribution raises the question, should the concentration of the deaths among older people affect how we value those deaths?

Identifying fair and economically correct treatment of seniors is difficult for two reasons. First, the recent pandemic has been much harsher on the elderly compared to previous pandemics; for example, the elderly comprised only 1% of deaths in the 1918 flu pandemic. Second, because seniors have shorter life expectancy, it has been suggested that we apply a different economic weight to their loss of life as compared to younger people.

VSL/ Focusing on the amount of remaining life offers the allure of quantitative precision but does not address the right economic issue. What matters is how much those affected and society in general are willing to pay to reduce the risks. Should we be willing to pay more, less, or the same to extend the life of an elderly person compared to a younger person? How do economists and government agencies put a dollar value on something as precious as risks to a human life?

The answer lies, in part, in the public policy literature that examines the Value of a Statistical Life (VSL), by which economists estimate how much money people are willing to pay (or be paid) to accept or evade small changes in the risk of death. Analysts use VSL estimates to infer an implicit value of life extension. In particular, workplace studies have examined how much more workers have to be paid to take jobs with higher fatality risk (e.g., test pilots versus airline pilots or underground mining versus above-ground mining). Economists have also studied how much individuals are willing to pay for safety improvements such as airbags or bicycle helmets, which reduce fatality rates or injuries.

Elderly COVID deaths/ In the United States, there is considerable evidence across numerous product and labor market settings that, on average, people are willing to pay about $110 for every 1 per 100,000 reduction in fatality risk involved in working or using a product or service. So, as a group, 100,000 people are willing to pay $ 11 million for a safer job, product, or life-saving service that would prevent one death from injury or disease. Because the specific life saved would not be known beforehand, this is called a "statistical...