[Reader-list] Economic Value, the Value of Economists, and the Meaning of Life

[Yazad Jal]

http://www.econlib.org/library/Columns/Courseyvalue.html

Economic Value, the Value of Economists, and the Meaning of Life

by Don Coursey*
September 16, 2002

"The next time you come down here you better bring a gun, son. And it better
be loaded." Thus ended a phone conversation I had with a concerned citizen
from southern Florida in February 1994. I was bewildered by this comment:
why would I need to bring a gun to insure my safety in Florida, and why did
this gentleman, a stranger, care so much about my welfare?

Earlier that month I publicly presented a report about my research
concerning how monies are distributed over the various species that are
protected under the Endangered Species Act. As an academic economist, my
work usually does not get much attention other than that derived from other
academic colleagues. And while these colleagues have not always liked my
work or its conclusions, it has never been suggested to me that I ought to
be armed when defending myself.

In the study, I looked at every land animal on the official list of
endangered species. Then I took the total amount of spending by the
government on each species and divided it by the population of that species.
The result was a measure of value, not value defined by its biological
importance, but a measure of how much we as a nation are willing to spend on
each member of each endangered species.

The full study can be found on line at New York University's Environmental
Law Journal (http://www.nyu.edu/pages/elj/). The bottom line of the study
will be transparent to any reader of the Econlib site: when making
trade-offs between species policy makers have favored the few-the so-called
glamour species-at the expense of many. Florida panthers, California
condors, whooping cranes, grizzly bears, and the bald eagle have won a
disproportionate share of the funds for habitat preservation, captive
breeding, and the like. Half of the money has been spent on eight species,
none at all on some others.

But when I made my presentation concerning funding levels for endangered
species, the media went abuzz. The study received a lot of attention and
kept my phone ringing for weeks.

One of these phone calls came from a major Southern Florida newspaper. As I
talked to the reporter, she kept returning to a point that she found key.
The highest valued animal in my study, the Florida panther, was treated
financially almost exactly the way in which human lives are treated in a
cost-benefit analysis where there is some probability that lives will be
lost. That is, we tend to treat for policy purposes each panther or person
as if they are worth about $5,000,000. I had not noted this point before and
found it interesting myself. The fact that we do treat the most highly
valued animal in the study almost exactly how we treat humans raises
interesting economic, moral, and philosophical questions.

But that was not what was bothering her. She kept trying to convince me that
the value for the panther was too high. She did not want to write a story
that implied that a cat was equal to a human. For a while I was polite and
recited the standard lines about no study being perfect, how point estimates
have noise associated with them, and how this study was just a beginning and
warranted further research. But this did not make her happy. She wanted an
outright statement that I had over-valued the panther. This I would not do.
We went back and forth over this for over two hours.

It became clear to me that her definition of value and my definition of
value were not the same. My measure of value was based on analyzing a set of
political and bureaucratic outcomes. My measures had no morality attached to
them. What she wanted was the "true" metaphysical value of the species. In a
bit of a huff, I ended the conversation.

When she wrote her story I understood why she was so dogged in her attempt
to make me retract or reduce my conclusions regarding the value of a
panther. Unknown to me, the results of my research made national news during
a time when environmentalists and ranchers were openly squaring off about
the fate of Florida's panthers. The debate had evolved into a duel of
opposing apocalypses. To the environmental groups, the world would end if
society spared any costs in the preservation of panthers. To the ranchers,
the economy of the region would collapse if land and other resources were
devoted to panther preservation. I then understood that the reporter from
Florida did not want to want to write a story that stated that we are
treating panthers as well as we treat humans; to her that would be
ammunition that the ranchers might use to further their argument that people
and jobs should come before endangered species preservation.

I also understood why I was bewildered by the warning to bring a gun to
Florida. This suggestion did not come from any pick-up driving, gun-toting,
Florida red-neck. It did not even come from the Florida ranchers or their
representatives. It was made by the Florida state president of a leading and
nationally respected environmental association! He did not want an
economist, mucking around with his tools of economic valuation, to have a
place at the table where decisions about the panther's future are being
debated.

To many, my conclusions about species value seem at odds with the basic
instinct that all life is worth saving. This is what makes public policy
involving economic valuation of life so difficult. It also makes economists
unpopular at cocktail parties. The fundamental notions of budgets,
opportunity costs, and trade-offs become complicated when they are publicly
applied to the value of life. The challenge facing the economist in these
settings is to find a way of advancing economic reality through the cloud of
emotional attachment people hold toward life.

Consider this conundrum: The Endangered Species Act places absolute value on
privileged plants and animals, a value enjoyed by no other being in society,
even a human child. And what is a child worth? The question itself may be
repugnant. Some may say that the value of a child's life is infinite, that
it is hierarchically more important than other values, or that it is only
appropriate to use philosophical or ethical tools to describe a child's
value. But while we may all feel that the value of a child's life is
infinite, in most cases we do not act as if that is the case.

A claim that society and the law do everything possible to save the lives of
all children is obviously untrue. Constraints force us to make choices about
how to divide resources between children and other arenas of policy. Sadly,
often tacitly, we recognize that the desire to serve our children cannot be
satiated; that as a society we cannot afford to place an infinite value on
their lives. Election results, government budgets, and agency behavior show
that people's willingness to tax themselves is finite, and does not extend
to universal care for all.

We cannot treat children as if their worth is infinite-that is the reality
of the world we live in. We do not have unlimited resources so we must make
choices. And we do; even the hard ones.

Stunningly, however, the Endangered Species Act puts an absolute value on
privileged animals and plants. The United States Supreme Court held in TVA
v. Hill, that the Act "shows clearly that Congress viewed the value of
endangered species as 'incalculable' or in practical terms infinite."

It may seem morally admirable to values any species infinitely, but this
position is not much more than a myth, and the practical affect of turning
that kind of sympathetic idea into federal policy has been devastating.
Because the Act creates an absolute, judicial right for certain species to
exist, decisions that ought to be debated among scientists and balanced by
the public are now fought in the courts. Rhetorical arguments, often
unrealistically extreme, hold sway. One side paints a picture of mass
extinction while the other side says that human life will end if its
arguments do not prevail. Resulting judgments issue from the mix-master of
motion practice and procedural constraints, often based on incomplete
science. And ultimately, the law is applied unevenly. A small proportion of
the listed species, the "charismatic mega-fauna," end up receiving the
lion's share of monetary resources; and my work shows that other species
receive little or no attention at all.

What's missing is the anchoring of endangered species protection within the
human and natural economy, rather than within absolutist, moral rhetoric.
The choices we face require an accounting of the benefits and costs of
various programs for saving endangered species. Criteria and analyses that
discriminate among species will be controversial but are unavoidable. It's
time to acknowledge that endangered species policy is about biology and
social choice. We must make discriminating choices about species. But under
the current Endangered Species Act regime, the discrimination is done by
lawyers and judges rather than a Congress that looks at the impact of
choices on the quality of public life.

Congress should take the opportunity to review the unwieldy regime created
by the Endangered Species Act. In the present implementation of the Act,
lawyers and judges, not scientists and the public, make existential
decisions about species in an environment that ignores human-and
societal-realities. A new process based upon broader public debate, and
focusing on real costs and science, should supplant the existing system.

We cannot ignore the laws of nature when valuing species or humans; neither
can we ignore the laws of economics. My point is that accomplishing the
latter is much harder than accomplishing the former. We implicitly value
life all of the time. But talking in a public policy setting about putting a
value on human or animal life makes many people uneasy. Often, the
instinctive reaction is that the task is impossible or that life of any form
has infinite value. Both problems are perceived as being outside of the
realm of economic analysis and belonging to another area of discussion.

These arguments are intellectually bankrupt. But they are strongly and
emotionally held by most of the public. The challenge to economists is to
tailor their arguments towards this audience. Economists will do well in
public policy discussions about life if they get even the basic notions of
constraints and opportunity costs onto the table. Economists need to
carefully and cleverly make their best principles of economics arguments in
these settings. And remember, the other side may be bringing guns.

* Don Coursey is the Ameritech Professor of Public Policy at the Harris
School of Public Policy Studies at the University of Chicago and a partner
at the firm Policy Solutions Ltd. in Chicago. His email address is
d-coursey at uchicago.edu