Monday, November 7, 2011

One of the risks of living is dying

From the incidental economist:

I can hear the howls of protest already. But here’s the example I always go to: the number one killer of children in the US is car accidents. But we don’t ever consider stopping driving. I know that every time I put my kids in a car, I’m significantly increasing the chance that they could die. But I (and pretty much all of you) believe that the benefit to our lives from cars outweighs the increased risk of death in our children. Let me put it another way. We all accept that it’s worth a number of children dying so that we can all get around more easily.

One of the great challenges that we face as a society is how to balance risks and benefits. I am becoming increasingly convinced that people are simply poor at making these trade-offs. This is especially true given that the risk of death is 100%. In a real sense we all end up dying. The goal, instead, seems to be to make the time that we have as good as possible. A theory of the joint maximization of lifespan and happiness seems to be the best way to go.

Given that, I think Dr Carroll's point is quite sound: we take risks all of the time in order to make life worth living. The trick is to quantify which risks are worthwhile, conditional on the absolute level of risk.

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