Out of curiosity, how far do you go consciously putting a price on things? Do you actually have a numerical figure you put on your own life? Would you feel comfortable putting a price on a friendship or a fetus? How much money is a point on Less Wrong worth to you?
Here is a simple way to assess your value-of-life (from an article by Howard).
Imagine you have a deadly disease, certain to kill you. The doctor tells you that there is one cure, it works perfectly, and costs you nothing. However, it is very painful, like having wisdom teeth pulled continuously for 24 hours without anesthetic.
However, the doctor says there is one other possible solution. It is experimental, but also certain to work. However, it isn’t free. “How much is it?” you ask. “I forgot,” says the doctor. “So, you write down the most you would pay, I’ll find out the cost, and if the cost is less than you are willing to pay, I’ll sign you up for the treatment. Otherwise, I’ll sign you up for the painful procedure.” What do you write down? Call that dollar amount X. For example, you might decide that you wouldn’t pay more than $50,000.
Now scratch the above paragraph; actually the treatment is free. However, it isn’t perfectly effective. It always cures the disease, but there is a small chance that it will kill you. “What is the chance?” you ask. “I forgot,” says the doctor. “So, you write down the largest risk of death you are willing to take, I’ll find out the risk, and if the risk is less than you are willing to take, I’ll sign you up for the treatment. Otherwise, I’ll sign you up for the painful procedure.” What do you write down? Call that probability Y. For example, you might decide that you aren’t willing to take more than a half-percent chance of death to avoid the pain.
Now you’ve established that Pain = $X loss of dollars, and that Pain = Y probability of death. Transitivity implies that $X loss of dollars = Y probability of death. Divide X by Y and you have your value-of-life. Above, $50K/0.5% = $10M value-of-life.
If you want, you can divide by one million and get a dollar cost for a one-in-a-million chance of death (called a micromort). For example, my micromort value is $12 for small risks (larger risks are of course different; you can’t kill me for $12M). I use this value to make health and safety decisions.
How much money is a point on Less Wrong worth to you?
That’s perhaps a generalization of the question, “how much is an hour of your time worth to you”, that was once brought up on Marginal Revolution. Not an easy question to answer.
I bought the book “Your Money or Your Life” on a friend’s recommendation, in good part to figure out how I answer that question. It goes into some of the complications like figuring out the real “total cost of ownership” of your job—this blog gives a nice brief illustration of the kind of thinking the book encourages. I haven’t really figured it out yet, but just thinking through the issues turns out to be valuable.
I’ve been toying with the idea of a post which illustrates on a smaller scale example the notion of applying “shut up and multiply” to some biggish life decisions, reporting on how my wife & I decided to no longer own a car after we figured out that the car was costing us around 10€ each day that we left it sitting in the garage, and that was a vast majority of the days in each year. No-one around us in similar situations seems to question that having a car is the “normal” choice.
“How much is this really worth” or “how much does this really cost” is an interesting question, one you can’t always answer with full precision, but the attempt is often in itself instructive and wortwhile. An hour or two spent on back-of-the-envelope calculations, maybe even a little Excel spreadsheet, can be a great way to identify less-than-fully-rational decisions you’re making just by not thinking about them.
Morendil, my guess is that you don’t question whether having a car is the “normal” choice, either, but you have started to question whether it’s the efficient choice. Most people don’t evaluate the economic efficiency of owning a car precisely because everyone agrees that it’s normal to own a car, and people often just do what they see as normal without stopping to think about it.
Incidentally, zipcar.com, an hourly car rental service, sometimes runs ads that break down the cost of using a Zipcar for your driving needs on an annual basis vs. the cost of owning a car. I checked the math on one of those ads and found it persuasive; I’ve been using Zipcar for 3 years now and have never felt the need to own a car.
That doesn’t follow. From our recognition of the finite value of “very valuable things” like our lives and friendships, it does not follow that we consciously put a specific price on things. Rather, it’s a recognition that, for any kind of rational (not-self-defeating) behavior, our actions must be as if they didn’t put an infinite value (or price) on anything.
And I hate to say it, but this article is really just telling the LW crowd things it already knows, and, more importantly, already appreciates beyond merely “knowing it in the abstract”.
And I hate to say it, but this article is really just telling the LW crowd things it already knows, and, more importantly, already appreciates beyond merely “knowing it in the abstract”.
I think you’re overestimating the level most LessWrong viewers are on. And anyway, dismissing good posts about elementary rationality stuff “because things discussed are already known” does sound a bit worrysome. We all start at the bottom.
this article is really just telling the LW crowd things it already knows, and, more importantly, already appreciates beyond merely “knowing it in the abstract”.
I’m fine with articles that tell us stuff we already know, or that someone wrote an article about before. No one’s perfect, we need remindings, the article might present it with a better perspective or explanation, etc. What makes this article different is that LWers don’t just know it, they actually appreciate the insight, i.e. put it into practice and successfully avoid errors based on assuming something has infinite value.
And, for that matter, I don’t think that any of the newbies, except maybe the really “out-there ones”, have made such an error.
LWers don’t just know it, they actually appreciate the insight [that life has a price], i.e. put it into practice and successfully avoid errors based on assuming something has infinite value. And, for that matter, I don’t think that any of the newbies, except maybe the really “out-there ones”, have made such an error.
Would this imply no Less Wrong readers believe in God?
Also, shedding the belief that life has infinite value is not a quick and simple process. It’s more like the beginning of an ongoing process. It requires pricing many things we consider priceless, where plenty of cognitive biases will get in the way.
There’s a set of useful links for anyone wanting to investigate the issue; it took a while to find the useful ones. In addition, some people (morendil, NancyLebovitz, bill) have made some useful contributions to this topic in the comments. If you and others still don’t think this page is useful, I’ll delete the article.
Thanks, I tweaked the post to better reflect that. It turns out (HT: Vladimir Nesov) Yvain posted about this topic on his blog, so I also included a link to that from this post.
I think we already take this for granted around here.
Out of curiosity, how far do you go consciously putting a price on things? Do you actually have a numerical figure you put on your own life? Would you feel comfortable putting a price on a friendship or a fetus? How much money is a point on Less Wrong worth to you?
Here is a simple way to assess your value-of-life (from an article by Howard).
Imagine you have a deadly disease, certain to kill you. The doctor tells you that there is one cure, it works perfectly, and costs you nothing. However, it is very painful, like having wisdom teeth pulled continuously for 24 hours without anesthetic.
However, the doctor says there is one other possible solution. It is experimental, but also certain to work. However, it isn’t free. “How much is it?” you ask. “I forgot,” says the doctor. “So, you write down the most you would pay, I’ll find out the cost, and if the cost is less than you are willing to pay, I’ll sign you up for the treatment. Otherwise, I’ll sign you up for the painful procedure.” What do you write down? Call that dollar amount X. For example, you might decide that you wouldn’t pay more than $50,000.
Now scratch the above paragraph; actually the treatment is free. However, it isn’t perfectly effective. It always cures the disease, but there is a small chance that it will kill you. “What is the chance?” you ask. “I forgot,” says the doctor. “So, you write down the largest risk of death you are willing to take, I’ll find out the risk, and if the risk is less than you are willing to take, I’ll sign you up for the treatment. Otherwise, I’ll sign you up for the painful procedure.” What do you write down? Call that probability Y. For example, you might decide that you aren’t willing to take more than a half-percent chance of death to avoid the pain.
Now you’ve established that Pain = $X loss of dollars, and that Pain = Y probability of death. Transitivity implies that $X loss of dollars = Y probability of death. Divide X by Y and you have your value-of-life. Above, $50K/0.5% = $10M value-of-life.
If you want, you can divide by one million and get a dollar cost for a one-in-a-million chance of death (called a micromort). For example, my micromort value is $12 for small risks (larger risks are of course different; you can’t kill me for $12M). I use this value to make health and safety decisions.
Would you accept a 95% chance of death for $36 million?
That’s perhaps a generalization of the question, “how much is an hour of your time worth to you”, that was once brought up on Marginal Revolution. Not an easy question to answer.
I bought the book “Your Money or Your Life” on a friend’s recommendation, in good part to figure out how I answer that question. It goes into some of the complications like figuring out the real “total cost of ownership” of your job—this blog gives a nice brief illustration of the kind of thinking the book encourages. I haven’t really figured it out yet, but just thinking through the issues turns out to be valuable.
I’ve been toying with the idea of a post which illustrates on a smaller scale example the notion of applying “shut up and multiply” to some biggish life decisions, reporting on how my wife & I decided to no longer own a car after we figured out that the car was costing us around 10€ each day that we left it sitting in the garage, and that was a vast majority of the days in each year. No-one around us in similar situations seems to question that having a car is the “normal” choice.
“How much is this really worth” or “how much does this really cost” is an interesting question, one you can’t always answer with full precision, but the attempt is often in itself instructive and wortwhile. An hour or two spent on back-of-the-envelope calculations, maybe even a little Excel spreadsheet, can be a great way to identify less-than-fully-rational decisions you’re making just by not thinking about them.
Morendil, my guess is that you don’t question whether having a car is the “normal” choice, either, but you have started to question whether it’s the efficient choice. Most people don’t evaluate the economic efficiency of owning a car precisely because everyone agrees that it’s normal to own a car, and people often just do what they see as normal without stopping to think about it.
Incidentally, zipcar.com, an hourly car rental service, sometimes runs ads that break down the cost of using a Zipcar for your driving needs on an annual basis vs. the cost of owning a car. I checked the math on one of those ads and found it persuasive; I’ve been using Zipcar for 3 years now and have never felt the need to own a car.
That doesn’t follow. From our recognition of the finite value of “very valuable things” like our lives and friendships, it does not follow that we consciously put a specific price on things. Rather, it’s a recognition that, for any kind of rational (not-self-defeating) behavior, our actions must be as if they didn’t put an infinite value (or price) on anything.
And I hate to say it, but this article is really just telling the LW crowd things it already knows, and, more importantly, already appreciates beyond merely “knowing it in the abstract”.
I think you’re overestimating the level most LessWrong viewers are on. And anyway, dismissing good posts about elementary rationality stuff “because things discussed are already known” does sound a bit worrysome. We all start at the bottom.
I agree. But note that I was careful to say:
I’m fine with articles that tell us stuff we already know, or that someone wrote an article about before. No one’s perfect, we need remindings, the article might present it with a better perspective or explanation, etc. What makes this article different is that LWers don’t just know it, they actually appreciate the insight, i.e. put it into practice and successfully avoid errors based on assuming something has infinite value.
And, for that matter, I don’t think that any of the newbies, except maybe the really “out-there ones”, have made such an error.
Would this imply no Less Wrong readers believe in God?
Also, shedding the belief that life has infinite value is not a quick and simple process. It’s more like the beginning of an ongoing process. It requires pricing many things we consider priceless, where plenty of cognitive biases will get in the way.
P.S. You’re saying Clippy is “out there”? :)
No need to worry to hate to say it—I want your truthful opinion. I’ve used your feedback to trim the article back appropriately.
Okay, but my other complaint was going to be that your article is mostly a quote from someone else, and now you’ve made it even more so!
There’s a set of useful links for anyone wanting to investigate the issue; it took a while to find the useful ones. In addition, some people (morendil, NancyLebovitz, bill) have made some useful contributions to this topic in the comments. If you and others still don’t think this page is useful, I’ll delete the article.
Because of the discussion, and the concise summary and collection of highly applicable links, I recommend against deleting.
Thanks, I tweaked the post to better reflect that. It turns out (HT: Vladimir Nesov) Yvain posted about this topic on his blog, so I also included a link to that from this post.