Crowd sourcing math, value of life
http://www.nber.org/papers/w9094.pdf
When speed limits in the USA were raised from 55 to 65 death rates also increased. The economic value of the lives lost amazingly equaled the average lifetime income.
Everyday people choose between ways to spend their time and money. They calculate the relative value of each and decide which best achieves their goals. Individually these choice can seem haphazard, irrational and even counter productive.
An economic decision is a choice that means giving up thing to get another. Another name is a trade off. Depending on the conditions of a particular situation the relative value changes. A man in a hot desert would more highly value a glass of water than a fancy winter coat. The same man would prefer the coat to the water if he were in the arctic.
Poor people often take great risks to earn a living than wealthier people precisely because it is to enable living. When those same people are wealthier they will take less risks. This is the main reason certain industries have moved from wealthy post-industrial nations to less developed nations. As those nations improve economically those jobs will be replaced by technology.
Ideas for further research.
Compare other risk reward ratios to create a formula between maximum loss, dying, and zero loss. This could explain crime and be useful for determining effective deterrents to crime and enticements to other occupations.
Is Your Product Too Expensive? How to calculate price and cost.
How to price your products to maximize demand and profit and create a strong business strategy using the Predictive Innovation® with Flying Cars as an example
$1000 Rechargeable Cordless Razor. How Much Are You Worth?
If I told you I bought a $1000 rechargeable cordless razor you would probably say I was nuts. There was a time when I would have said so as well. And no, I never paid $1000 for a razor. But I did discover just how valuable such small items can be.
When I was a consultant in Silicon Valley during the 1990′s I had 3 contracts at a time. In the morning I would drive into San Francisco from Sunnyvale where I lived. I would work for my financial clients until 5 pm, then I continued my clockwise trip around the bay to Oakland where I had a second contract designing and developing the virtual reality engine used in many video games including Top Gun and Falcon 4.0. I would work there until 10 pm or 11 pm then finish my circle of the bay by driving back home to Sunnyvale. On the weekends I wouldn’t have to drive because I worked out of my house on smaller projects.
As you can imagine I did a whole lot of driving. A little over and hour and half each day. The work plus driving schedule didn’t leave me much time for anything else. Why was I working so much? Because I was 26 years old and making over $250,000 a year. That wasn’t stock options that was cash in my hand.
One day while getting ready in the morning I thought about my hourly rate and what the 10 minutes a day I spent shaving was worth. At my average hourly rate I was spending $12 each morning to shave. WOW. I would never pay someone $12 to shave my face. A little multiplication and I discovered I was wasting $262 every month just on shaving. I immediately went out and bought a rechargeable cordless electric razor. The razor cost $79, an amount that I previously had thought was extravagant. So instead of wasting time in the bathroom I would shave while I was driving and that razor paid for itself in the first week. So now I consider that I paid $79 for a $1000 rechargeable cordless razor.
After that I looked at my whole life and found many ways to put my time to the best use. Now what ever I do I’m calculating “is this something that I would be better off paying to have done?” And the more times I find that is true the more pleased I am at my success. It means my value is increasing. How Much Are You Worth?
Action Items:
- Figure out what your time is worth
- Find repetitive tasks that could be shortened or eliminated
- Determine if it’s cheaper for someone else to do the task
- Remember time to do things you enjoy, life is just as valuable as work.
