----- Original Message -----
From: "John D. Giorgis" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Wednesday, July 25, 2001 9:37 PM
Subject: Ransom Re: Europe, the US, and Environmentalism
> The only way to truly value your life, is to consider the following
question:
> How much would someone have to offer you to take a hypothetical injection
> that will killy instantly and painlessly in one month's time?
>
The only way? That is quite a statement. You know you are opening yourself
to being proven wrong by one counter example. Let me give another example,
one that reflects on Dee's post discussing risk analysis as part of humans
decision making process.
I think it is safe to say that I value $40 40x as much as I value $1, and I
value $60 60x as much as $1. If I were offered a wager, where I would give
someone $40 if they turned up the ace of spades ( from a deck which I knew
to be honest and to be shuffled in a truely random manner), and they would
give me 1 dollar if any other card were turned up, I'd take that bet in a
heatbeat. But, if I had to pay $60, I would never take the bet.
OK, now lets go to paying for rental car insurance. I waive the insurance
because, at $8.00 per day, the chances would have to be greater than 1 in 62
that I'd have an accident on any given day. Basically, I multiply the
probability of the accident times the financial risk if it does happen, and
if that amount is lower than the insurance, I don't get it; if it is higher,
I do.
Now, you said you value your life at 500 million to 1 billion. Thus, the
break even for you avoiding a 1 in a million chance of death in a given
year is $500 to $1000. Usuing a 10% return on investment, the break even
point for a one time payment that could avoid a 1 in a million chance of
death over your entire life is $5000 to $10000.
Would you really spend that type of money to eliminate a 1 in a million
chance? Would you spend $5000 to $10000 per year to eliminate a 1 in 100000
chance?
Dan M.
