Saturday, November 29, 2008

24: How much is a life worth?

Instead of going out today, I decided to get some work done. I watched 24 Redemption during dinner and got to thinking (because of all the killing), How much is a life worth?

I found the 2008 World GDP (Gross World Product, purchasing power parity) which is $65.61 trillion from CIA using 2007 Est). Got the world population on Jan 1 2008 which was 6,773,969,906. Calculated World GDP Per Capita in 2008 to be $9685.61

This will be the annuity amount: $9685.61

Years left to live= (64.3 life expectancy men- 27.4 average age of men)*(0.502487562 proportion of men)+ (68.35 - 28.7 average age of women)(0.497512438 proportion population who are women) = 38.27

The life expectancy seems really high for the world. I doubt the stats. I think it's closer to 55 on average. I don't know anyone over the age of 65 besides my grandma. Plus you got way more pollution now, diseases, and UV and stuff; so I'm going to go Bayesian and revise it down to 54. Also old people aren't really working so with the revision on the prior probability, years left to live is 38-11=27

GWP Growth Rate 2007 est= 5.2%
Weighted Average Interest of the world= data not found. My estimate 8%

PV of annuity of $9685.61 with 27 periods at 8% discount with 5.2% growth
= $175,717.32

And that's how much the average life is worth by my calculations. It's probably wrong.

Most stats from here:
Life Worth Calculator

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