Cost of Living

"Your money or your life." The choice traditionally presented by the highwayman（拦路强盗） is supposed to have only one sensible answer. Money is, after all, no use to a corpse¹. Yet economists² 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 awkward³（尴尬的） 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 dreadful⁴: it confuses what I think my life is worth with what my boss thinks my life is worth.

 

So an alternative is to ask people how much they would pay for a safer car or kitchen cleaner. But such surveys do not always produce sensible results. Our answers depend on whether we're being offered a safer? 10 household cleaner and then asked if we want the more dangerous? 5 version, or whether we're offered the? 5 brand and then asked if we'll pay? 10 for the safer product. People often answer "no" to both questions, contradicting⁵ themselves. These inconsistencies mean that we're either irrational⁶ or lying to pollsters, and perhaps both.

 

Economists therefore tend to prefer observing real choices. More orthodox⁷（正统的） approaches look at career choices: if you're willing to be a lumberjack（伐木工人）, part of that decision is to accept risk in exchange for financial reward.

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