Quantitative valuation of a human life (from a guy who stinks at math)
This weekend I went on a run in Prospect Park with my good friend Eric Ruben. He is not involved in the startup world at all (white collar criminal defense attorney), but I include the above link because his beard in this picture is amazing. Anyway, he asked me to explain the “impact statement” that permanently occupies the upper right corner of this blog (reproduced below):
I think there is one metric that can be used to measure the value of a human life and that’s impact. How did you change things? How many people did you touch? How different is the world because you lived in it and how positive was the change that you affected?
I proposed the following equation as a way to calculate the impact of a person’s single action (I have not taken a math class since high school, so if this is wrong, please suggest modifications):
(# of people positively impacted) x (volume of positive impact) – (# of people negatively impacted) x (volume of negative impact) = Total Net Impact of action
Therefore:
(Total Net Impact of action)x(all actions of 1 person) = Total Net Impact of a person
where:
impact = the change in trajectory of recipient’s life by the action
volume = fictitious scale of -100 to 100, with 0 being either no impact or neutral impact
Each action carries a different volume of impact, as defined on our -100 to 100 unit scale. For demonstration purposes, I will peg some human actions to the scale (recognizing that weighting this scale objectively is impossible):
Unit: Action
-100: I kill Jim (most profound possible change on trajectory of Jim’s life)
-75: I steal Jim’s wife and true love
-15: I fire Jim
-.0002: I make Jim cry:
-.0001: I don’t say hello when I see Jim
0: I don’t exist
.0001: I say hello to Jim
.0002: I make Jim laugh
15: I employ Jim
75: I introduce Jim to his wife and true love
100: I give birth to Jim (most profound possible change on trajectory of Jim’s life)
Ok, almost done with the setup, bare with me please.
Based on our equation for Total Net Impact of a life:
(Total Net Impact of action)x(all actions of 1 person) = Total Net Impact of a person
There is a limiting factor which I will call personal bandwidth (or energy). If you don’t like that variable, we could use time as a proxy for personal bandwidth, but that does not really factor in the efficiency with which someone executes on their time. Regardless, I guess we’ll say that:
Sum(all actions of 1 person) = total personal bandwidth
So now, every person chooses to allocate their personal bandwidth differently, and this allocation is expressed in the actions an individual takes.
And here is where there are multiple paths to maximizing net impact. My roommate, Alex, would say he spends an outsized portion of his personal bandwidth attempting to positively impact his family’s lives. So let’s say he spends 50% of his bandwidth performing 10 actions a day, each of which has a 10 unit impact per family member (calls mom every day, tells her I love you…etc), and his family is 3 members beyond himself. His daily impact on his family is (10)(10)(3) = 300 units of impact. Now he has 50% bandwidth remaining. He spends 25% on 1000 actions that each impact his own life .5 units (eating, thinking, scratching an itch, lifting weights, etc…) for a total impact of (1000)(.5)(1) where one is himself, for a total net impact of 500. He spends 20% of his bandwidth writing an article for Time Magazine that has a .05 impact on the 600,000 people who read it, for a total net impact of (.05)(600,000) = 30,000. The remaining 5% of his bandwidth he spends yelling at his roommate for being messy, which has a (-1 impact)(1 roommate) = -1 Total Net Impact. So in one day, Alex’s Total Net Impact = 30,000+300+500-1, or 30,799
This math would suggest that Alex should spend more time creating content for Time Magazine, and less time calling his Mom and Dad, assuming he subscribes to my equation for valuing a human life. But, this is where the subjectivity of weighting in our Jim Scale throws a wrinkle into the math. While I valued the impact of his article at .05, or 1/20 of the value of a call to his mom (10), Alex might value the impact of the article on a reader at .0005, or 1/2,000 of the impact a call to mom. If so, his Total Net Impact would = 300+300+500-1, or1,099. Obviously, on that scale, his current allocation of his personal bandwidth is much closer to optimization.
Social proximity of the recipient to the actor (impactor) seems to be the primary culprit influencing deviation from an objective valuation of an action’s impact. When allocating bandwidth, it is human nature to weight the impact on family > impact on friends > impact on countrymen > impact on foreigners > impact non-humans > non-living (environment). So a typical American might (incorrectly) weight the same action, let’s say donation of $1 to a starving child, at 2 units of impact if the recipient lives in the United States, and at 1 unit if he is in Sudan. This is not to say value is uncorrelated to social proximity. I think a large part of impact is dependent on the level of receptivity a given recipient has to that action. So, Alex’s mom is much more likely to internalize his action and incorporate it into her future, than is one of his readers, and therefore perhaps the potential impact of an actor may be inversely correlated to the strength of relationship between actor and recipient.
Personally, my sense is that independent of how you weight the scale, the number of people impacted is the most scalable and important lever in maximizing Total Net Impact. As such, it is a personal goal of mine to touch as many people as possible over the course of my life. Building consumer facing companies that have a positive impact on a large volume of people feels like an effective vehicle to realize immediate impact, but I think this equation applies to all vocations and walks of life. Whether you are a painter, politician, or preacher, the mission is the same. Take your innate skill and vision, and try to scale it to as many people as possible. There is no reason to stop where social proximity begins to flat line…
P.S. my brain is basically fried after trying to quantify this concept, but I’d be interested to run well known entrepreneurs through this model, in an effort to try to power rank the top 10 entrepreneurs by Total Net Impact. I.e. how does Bill Gates stack up to the guys who started Kiva, etc…good luck weighting the scale. Please post results if you are masochistic enough to take this on.
Jordan Cooper's Blog: startups, venture capital, etc... 
Ruben’s beard makes a 67 on me, somewhere between providing me gainful employment and introducing me to my true love. Sorry if this is off topic. But is it?
bcon
November 24, 2009
I received this email last night from a guy named Jordan Rule…too good not to post…
“Your blog post trivializes the entire fields of both Political Science and Economics. Your algorithm also doesn’t have much use past setting wages in some sort of post-apocalyptic communist regime.
My first comment is to lay off the ganja.
My second comment is to look into some of Seth Goldstein’s writings from 2006ish when he was working on some interesting Attention Economy stuff: http://majestic.typepad.com/seth/2006/07/index.html.
I’m in Billyburg if you ever want to bullshit over beers.”
Wish I was smart enough to understand what he is talking about
jordancooper
November 24, 2009
Best line: “Personally, my sense is that independent of how you weight the scale, the number of people impacted is the most scalable and important lever in maximizing Total Net Impact.”
brett
November 24, 2009
That’s why I love OLX. Every month we touch 100 million people. I suppose most of them don’t find what they are looking for, some fall prey to scams but a lot find something valuable to them and in many ways we made their lives marginally better…
Fabrice
December 5, 2009