At Event Horizon we had a policy for around 6-9 months where if you got a microcovid, you paid $1 to the house
That gives an implied cost of $1 million dollars for someone getting COVID-19, which seems way overpriced to me. I thought I’d do a quick Fermi estimate to verify my intuitions.
I don’t know how many people are in Event Horizon, but I’ll assume 15. Let’s say that on average about 10 people will get COVID-19 if one person gets it, due to some people being able to isolate successfully. I’m going to assume that the average age there is about 30, and the IFR is roughly 0.02% based on this paper. That means roughly 0.002 expected deaths will result. I’ll put the price of life at $10 million. I’ll also assume that each person loses two weeks of productivity equivalent to a loss of $20 per hour for 80 hours = $1600, and I’ll assume a loss of well-being equivalent to $10 per hour for 336 hours = $3360. Finally, I’ll assume the costs of isolation are $1,000 per person. Together, this combines to $10M x 0.002 + ($1600 + $3360) x 10 + $1000 x 15 = $84,600.
However, I didn’t include the cost of long-covid, which could plausibly raise this estimate radically depending on your beliefs. But personally I’m already a bit skeptical that 15 people would be willing to collectively pay $86,400 to prevent an infection in their house with certainty, so I still feel my initial intuition was mostly justified.
(I lived in this house) The estimate was largely driven by fear of long covid + a much higher value per hour of time, which also factored in altruistic benefits from housemate’s work that aren’t captured by the market price of their salary.
There were also about 8 of us, and we didn’t assume everyone would get it conditional on infection (household attack rates are much lower than that, and you might have time to react and quarantine). We assumed maybe like 2-3 others.
I totally expect we would have paid $84,600 to prevent a random one of us getting covid—and it would’ve even looked like a pretty cheap deal compared to getting it!
The estimate was largely driven by fear of long covid + a much higher value per hour of time
Makes sense, though FWIW I wasn’t estimating their wage at $20 an hour. Most cases are mild, and so productivity won’t likely suffer by much in most cases. I think even if the average wage there is $100 after taxes, per hour (which is pretty rich, even by Bay Area standards), my estimate is near the high end of what I’d expect the actual loss of productivity to be. Though of course I know little about who is there.
ETA: One way of estimating “altruistic benefits from housemate’s work that aren’t captured by the market price of their salary” is to ask at what after-tax wage you’d be willing to work for a completely pointless project, like painting a wall, for 2 weeks. If it’s higher than $100 an hour I commend those at Event Horizon for their devotion to altruism!
If it’s 8 hour workdays and 5 days a week, at $100/hour that’s 8 * 10 * 100 = $8k. No, you could not pay me $8k to stop working on the LW team for 2 weeks.
I’m kind of confused right now. At a mere $15k, you could probably get a pretty good software engineer to work for a month on any altruistic project you wish. I’m genuinely curious about why you think your work is so irreplaceable (and I’m not saying it isn’t!).
You could certainly hire a good software engineer at that salary, but I don’t think you could give them a vision and network and trust them to be autonomous. Money isn’t the bottleneck there. Just because you have the funding to hire someone for a role doesn’t mean you can. Hiring is incredibly difficult. Go see YC on hiring, or PG.
Most founding startup people are worth way more than their salary.
When my 15-person house did the calculation, we had a higher IFR estimate (I think 0.1%) and a 5x multiplier for long COVID, which gets you most of the way there. Not sure why we had a higher IFR estimate—it might be because we made this estimate in ~June 2020 when we had worse data, or plausibly IFR was actually higher then, or we raised it to account for the fact that some people were immunocompromised.
But personally I’m already a bit skeptical that 15 people would be willing to collectively pay $86,400 to prevent an infection in their house with certainty
(Fwiw, at < $6000 per person that seems like a bargain to me. At the full million, it would be ~$63,000 per person, which is now sounding iffy, but still plausible. Maybe it shouldn’t be plausible given how low the IFR is -- 0.02% does feel quite a bit lower than I had been imagining.)
Still, I think you shouldn’t ask about paying large sums of money—the utility-money curve is pretty sharply nonlinear as you get closer to 0 money, so the amount you’d pay to avoid a really bad thing is not 100x the amount you’d pay to avoid a 1% chance of that bad thing. (See also reply to TurnTrout below.)
You could instead ask about how much people would have to be paid for someone with COVID to start living at the house; this still has issues with nonlinear utility-money curves, but significantly less so than in the case where they’re paying. That is, would people accept a little under $6000 to have a COVID-infected person live with them?
Fwiw, at < $6000 per person that seems like a bargain to me
Possibly my intuition here comes from seeing COVID-19 risks as not too dissimilar from other risks for young people, like drinking alcohol or doing recreational drugs, accidental injury in the bathroom, catching the common cold (which could have pretty bad long-term effects), kissing someone (and thereby risk getting HSV-1 or the Epstein–Barr virus), eating unhealthily, driving, living in an area with a high violent crime rate, insufficiently monitoring one’s body for cancer, etc. I don’t usually see people pay similarly large costs to avoid these risks, which naturally makes me think that people don’t actually value their time or their life as much as they say.
One possibility is that everyone would start paying more to avoid these risks if they were made more aware of them, but I’m pretty skeptical. The other possibility seems more likely to me: value of life estimates are susceptible to idealism about how much people actually value their own life and time, and so when we focus on specific risk evaluations, we tend to exaggerate.
ETA: Another possibility I didn’t mention is that rationalists are just rich. But if this is the case, then why are they even in a group house? I understand the community aspect, but living in a group house is not something rich people usually do, even highly social rich people.
Still, I think you shouldn’t ask about paying large sums of money—the utility-money curve is pretty sharply nonlinear as you get closer to 0 money, so the amount you’d pay to avoid a really bad thing is not 100x the amount you’d pay to avoid a 1% chance of that bad thing.
So the $6000 cost is averting roughly 100 micromorts (~50% of catching it from the new person * 0.02% IFR), ignoring long COVID. Most of the things you list sound like < 1 micromort-equivalent per instance? That sounds pretty consistent.
E.g. Suppose unhealthy eating knocks off ~5 years of lifespan (let’s call that 10% as bad as death, i.e. 10^5 micromorts). You have 10^3 meals a year, times about 50 years, for 5 * 10^4 meals, so each meal is roughly 2 micromorts = $120 of cost. On this model, you should see people caring about their health, but not to an extraordinary degree, e.g. after getting the first 90% of benefit, then you stop (presumably you value a tasty meal at ~$12 more than a not-tasty meal, again thinking at the margin). And empirically that seems roughly right—most of the people I know think about health, try to get good macronutrient profiles, take supplements where relevant, but they don’t go around conducting literature reviews to figure out the optimal diet to consume.
Also, I think partly you might be underestimating how risk-avoiding people at Event Horizon and my house are—I’d say both houses are well above the typical rationalist. (And also that a good number of these people are in fact rich, if we count a typical software engineer as rich.)
Another possibility I didn’t mention is that rationalists are just rich. But if this is the case, then why are they even in a group house? I understand the community aspect, but living in a group house is not something rich people usually do, even highly social rich people.
There’s a pretty big culture difference between rationalists and stereotypical rich people. One of those is living in a group house. I currently prefer a group house over a traditional you-and-your-partner house regardless of how much money I have.
I ended up saying that long-covid costs were roughly the same as death, so it was a factor of 2x.
Price of a life at $10 million is a bit low, I put mine at $50 million, so a factor of 5x difference.
I didn’t follow all of your calculations about being out for 2 weeks and isolated, I basically just did those two (death and long covid) and it came to ~$200k for me. Roughly say that’s the average among 5 people and then you get to $1 per microcovid to the house.
That gives an implied cost of $1 million dollars for someone getting COVID-19, which seems way overpriced to me. I thought I’d do a quick Fermi estimate to verify my intuitions.
I don’t know how many people are in Event Horizon, but I’ll assume 15. Let’s say that on average about 10 people will get COVID-19 if one person gets it, due to some people being able to isolate successfully. I’m going to assume that the average age there is about 30, and the IFR is roughly 0.02% based on this paper. That means roughly 0.002 expected deaths will result. I’ll put the price of life at $10 million. I’ll also assume that each person loses two weeks of productivity equivalent to a loss of $20 per hour for 80 hours = $1600, and I’ll assume a loss of well-being equivalent to $10 per hour for 336 hours = $3360. Finally, I’ll assume the costs of isolation are $1,000 per person. Together, this combines to $10M x 0.002 + ($1600 + $3360) x 10 + $1000 x 15 = $84,600.
However, I didn’t include the cost of long-covid, which could plausibly raise this estimate radically depending on your beliefs. But personally I’m already a bit skeptical that 15 people would be willing to collectively pay $86,400 to prevent an infection in their house with certainty, so I still feel my initial intuition was mostly justified.
(I lived in this house) The estimate was largely driven by fear of long covid + a much higher value per hour of time, which also factored in altruistic benefits from housemate’s work that aren’t captured by the market price of their salary.
There were also about 8 of us, and we didn’t assume everyone would get it conditional on infection (household attack rates are much lower than that, and you might have time to react and quarantine). We assumed maybe like 2-3 others.
I totally expect we would have paid $84,600 to prevent a random one of us getting covid—and it would’ve even looked like a pretty cheap deal compared to getting it!
Makes sense, though FWIW I wasn’t estimating their wage at $20 an hour. Most cases are mild, and so productivity won’t likely suffer by much in most cases. I think even if the average wage there is $100 after taxes, per hour (which is pretty rich, even by Bay Area standards), my estimate is near the high end of what I’d expect the actual loss of productivity to be. Though of course I know little about who is there.
ETA: One way of estimating “altruistic benefits from housemate’s work that aren’t captured by the market price of their salary” is to ask at what after-tax wage you’d be willing to work for a completely pointless project, like painting a wall, for 2 weeks. If it’s higher than $100 an hour I commend those at Event Horizon for their devotion to altruism!
If it’s 8 hour workdays and 5 days a week, at $100/hour that’s 8 * 10 * 100 = $8k. No, you could not pay me $8k to stop working on the LW team for 2 weeks.
I think $30k-$40k might make sense.
I’m kind of confused right now. At a mere $15k, you could probably get a pretty good software engineer to work for a month on any altruistic project you wish. I’m genuinely curious about why you think your work is so irreplaceable (and I’m not saying it isn’t!).
You could certainly hire a good software engineer at that salary, but I don’t think you could give them a vision and network and trust them to be autonomous. Money isn’t the bottleneck there. Just because you have the funding to hire someone for a role doesn’t mean you can. Hiring is incredibly difficult. Go see YC on hiring, or PG.
Most founding startup people are worth way more than their salary.
When my 15-person house did the calculation, we had a higher IFR estimate (I think 0.1%) and a 5x multiplier for long COVID, which gets you most of the way there. Not sure why we had a higher IFR estimate—it might be because we made this estimate in ~June 2020 when we had worse data, or plausibly IFR was actually higher then, or we raised it to account for the fact that some people were immunocompromised.
(Fwiw, at < $6000 per person that seems like a bargain to me. At the full million, it would be ~$63,000 per person, which is now sounding iffy, but still plausible. Maybe it shouldn’t be plausible given how low the IFR is -- 0.02% does feel quite a bit lower than I had been imagining.)
Still, I think you shouldn’t ask about paying large sums of money—the utility-money curve is pretty sharply nonlinear as you get closer to 0 money, so the amount you’d pay to avoid a really bad thing is not 100x the amount you’d pay to avoid a 1% chance of that bad thing. (See also reply to TurnTrout below.)
You could instead ask about how much people would have to be paid for someone with COVID to start living at the house; this still has issues with nonlinear utility-money curves, but significantly less so than in the case where they’re paying. That is, would people accept a little under $6000 to have a COVID-infected person live with them?
Possibly my intuition here comes from seeing COVID-19 risks as not too dissimilar from other risks for young people, like drinking alcohol or doing recreational drugs, accidental injury in the bathroom, catching the common cold (which could have pretty bad long-term effects), kissing someone (and thereby risk getting HSV-1 or the Epstein–Barr virus), eating unhealthily, driving, living in an area with a high violent crime rate, insufficiently monitoring one’s body for cancer, etc. I don’t usually see people pay similarly large costs to avoid these risks, which naturally makes me think that people don’t actually value their time or their life as much as they say.
One possibility is that everyone would start paying more to avoid these risks if they were made more aware of them, but I’m pretty skeptical. The other possibility seems more likely to me: value of life estimates are susceptible to idealism about how much people actually value their own life and time, and so when we focus on specific risk evaluations, we tend to exaggerate.
ETA: Another possibility I didn’t mention is that rationalists are just rich. But if this is the case, then why are they even in a group house? I understand the community aspect, but living in a group house is not something rich people usually do, even highly social rich people.
Makes sense.
So the $6000 cost is averting roughly 100 micromorts (~50% of catching it from the new person * 0.02% IFR), ignoring long COVID. Most of the things you list sound like < 1 micromort-equivalent per instance? That sounds pretty consistent.
E.g. Suppose unhealthy eating knocks off ~5 years of lifespan (let’s call that 10% as bad as death, i.e. 10^5 micromorts). You have 10^3 meals a year, times about 50 years, for 5 * 10^4 meals, so each meal is roughly 2 micromorts = $120 of cost. On this model, you should see people caring about their health, but not to an extraordinary degree, e.g. after getting the first 90% of benefit, then you stop (presumably you value a tasty meal at ~$12 more than a not-tasty meal, again thinking at the margin). And empirically that seems roughly right—most of the people I know think about health, try to get good macronutrient profiles, take supplements where relevant, but they don’t go around conducting literature reviews to figure out the optimal diet to consume.
Also, I think partly you might be underestimating how risk-avoiding people at Event Horizon and my house are—I’d say both houses are well above the typical rationalist. (And also that a good number of these people are in fact rich, if we count a typical software engineer as rich.)
There’s a pretty big culture difference between rationalists and stereotypical rich people. One of those is living in a group house. I currently prefer a group house over a traditional you-and-your-partner house regardless of how much money I have.
List of changes that stand out to me:
I ended up saying that long-covid costs were roughly the same as death, so it was a factor of 2x.
Price of a life at $10 million is a bit low, I put mine at $50 million, so a factor of 5x difference.
I didn’t follow all of your calculations about being out for 2 weeks and isolated, I basically just did those two (death and long covid) and it came to ~$200k for me. Roughly say that’s the average among 5 people and then you get to $1 per microcovid to the house.