How much money your life is actually worth in SA

Depending on who you consult, a single life in South Africa is placed  at anywhere between R3.4 million and R24.2 million.

Placing a monetary value on a human life is a controversial topic, and may seem a little callous.

However, when it comes to determining the cost-benefit of infrastructure, environmental, medical and insurance projects, it can be necessary and justified.

Essentially, the figures above represent an economic term called the value of a statistical human life (VSL) – how much income (or wealth) individuals are willing to exchange for small changes in mortality risks.

If, for example, 100,000 people were each willing to spend $100 to decrease the chances of mortality, the estimated statistical value of a single human life would be $10 million (100,000 x $100).

The number is important for policy makers, and is used for statistical calculations related to various industries – such as insurance, medicine, environmental and infrastructure.

It is also used to determine the economic impact of deaths in the country – such as lives lost to disease, road accidents and other causes.

An example would be if a number of people settled in a region that was prone to flooding, government would need to determine whether it would be “worth it” to improve infrastructure in the area, or spend money on flood prevention.

If the total cost of these projects was greater than the value of human life in the area, policy makers would need to reassess their strategy.

If lives were lost due to flooding, the statistic could then be used to determine the total economic impact of those deaths – cold and cruel, but necessary.

The value of life in South Africa

Based on tuberculosis data from South Africa in 2006, the World Health Organisation determined the economic impact of TB deaths, using a baseline VSL of $230,000 (R3.15 million). This was used to determine economic impact of deaths in the sub-Saharan Africa region.

In a 2012 document looking at the environmental impact of Eskom’s failure to comply with South African emission standards, Greenpeace cited OECD values on VSL.

These placed the value of human life in South Africa between R5.4 million and R28.7 million (mean of R12.1 million) for adults – and between R8.1 million and R57.5 million (mean of R24.2 million) for children.

Another way to determine the true VSL is by looking at the potential earning and consuming power and how that impacts base VSL numbers.

A 2011 study looking at the elasticity of VSL – as affected by potential income changes – estimated that the statistical value of a human life in South Africa was between $316,000 (R4.3 million) and $1.5 million (R20.5 million) – a mean of $692,000 (R9.5 million).

The study, published in the Journal of Benefit-Cost Analysis, sought to determine how VSL would change with an increase in real income, in both high-income and low-income nations.

Value of life in the USA

Due to its strong economy and high earning power, the USA carries the highest value of human life.

In the country, a high-income nation, human life has a statistical dollar value of anywhere between $600,000 (R8.2 million) and $9.1 million (R124 million).

The former is what a soldier’s family can expect to be given in compensation should their loved one fall in military service.

The latter figure is what the US department of transport determined, based on eight different studies which delivered a range between $5 million and $13.2 million (median value of $9.1 million).

Figures compiled by the US Environmental Protection Agency (EPA) puts the value at $8.5 million (R116 million), while the aforementioned 2011 study put it at $7.2 million (R98 million).

All numbers have been adjusted for inflation from 2007 dollars, and converted at a rate of USD 1 = ZAR 13.69.

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How much money your life is actually worth in SA