Money or life? The complex moral equation of balancing lives and the economy

As the debate continues in Cayman and around the world, the Compass uses a figure called value of statistical life to help determine whether the country's economic lockdown was worth the lives potentially saved.

Let’s not bury the lead – statistically speaking and according to our non-scientific calculations, the value of the lives potentially saved by a government’s COVID-19 suppression measures outweigh the damage to Cayman’s economy.

You’ll see below how we arrive at that conclusion.

Premier Alden McLaughlin over the past three months has remained steadfast in his support for stringent coronavirus-suppression measures, even in the face of mounting pressure to open the economy sooner.

“We are not prepared to sacrifice any life just to get business back to normal,” he said at a government press conference last month, while acknowledging many businesses have been “crippled” due to the suppression measures.

- Advertisement -

Not everyone agrees with him and McLaughlin has several times lamented calls to ease restrictions at a faster pace in the name of economic recovery.

“It is deeply concerning to me and to us all, when we see and hear some of the very narcissistic comments that are made which contend that essentially we should just let the elderly and the vulnerable people die,” he has said.

Instead, McLaughlin’s government has continued to reopen the economy bit by bit. Many businesses have been able to open at this point, albeit while having to meet several physical-distancing and regulatory requirements. Others remain closed, their owners and employees desperate to reopen their doors.

Series examining lives vs. economy
What is value of statistical life?
Calculating VSL creates moral dilemma

The calculations

As Cayman’s businesses start the journey to regain their footing, the question remains – was the lockdown worth the potential lives saved?

The important thing to note – as economists around the world will agree – we’re simply talking the value of life as a statistical figure here.

To answer that question, we first need to settle on a ‘value of statistical life’ for those living here. The Cayman Islands does not have an official VSL used by government entities.  The figure varies in the United States, but the Environmental Protection Agency uses a VSL equivalent to $6.1 million. In the UK, the generally accepted amount is around $1.9 million.

Let’s average those two out and say that, statistically speaking, the value of a life in Cayman is $4 million.

Public health officials have estimated that up to 910 people in Cayman could have died due to COVID-19 with no suppression measures. Those figures are based on modelling done by the Ministry of Health.

If you take the value of one statistical life ($4 million) and multiply it by the estimated number of people potentially saved by the suppression measures, we get a total value of $3,640,000,000.

That’s $3.64 billion worth of statistical lives saved.

Last month, Finance Minister Roy McTaggart said Cayman’s gross domestic product could fall up to 12.2% in 2020 due to the COVID-19 pandemic and ensuing suppression measures. The latest GDP figures for Cayman provided by the Economics and Statistics Office are from 2018. That figure puts Cayman’s GDP at $4.35 billion.

Assuming the 2020 GDP normally would’ve been in that ballpark, a 12.2% drop would mean a loss of roughly $530 million.

By our – admittedly rudimentary – calculations, the lockdown was worth the lives it potentially saved.

Statistically, the tipping point appears to be right around 132.5 people. If the suppression measures saved at least 133 people, it still makes sense statistically to have shut down the economy.

Put another way, if the measures saved 132 people or fewer, those lives would not have been worth it – from a purely financial standpoint.

Flawed calculations

Of course, these calculations are flawed for many reasons.

For one, averaging VSLs used in the US and UK does not reflect an accurate VSL for the Cayman Islands.

Our calculations also do not take into consideration economic fallout beyond 2020 nor variables such as the development of a vaccine or whether the initial forecasts of potential death rates were even accurate.

While the main purpose of such statistical analysis is not to weigh the value of one life against another, doctors in the countries most severely impacted by the virus have been forced to make such cold calculations. When health services were overwhelmed in Italy, access to potentially life-saving equipment – like ventilators – had to be rationed.

Italian doctors were given guidelines to prioritise those with the greatest chance of successful treatment and suggested it “may be necessary” to place an age limit on those being admitted to intensive care.

“The top consideration is maximising benefits in terms of the number of lives saved and the number of life years saved,”  Dr. Ezekiel Emanuel, co-author of a set of ethical guidelines on rationing access to limited resources during COVID-19, told the BBC.

Though those considerations focussed on age and health rather than the financial value of a life, the same ethical questions are at play.

How do you measure the value of a life?

Thankfully, the measures taken in Cayman appear to have suppressed the virus to the point where this can remain a theoretical debate.

- Advertisement -

Support local journalism. Subscribe to the all-access pass for the Cayman Compass.

Subscribe now


  1. Kevin, your article is very valid, valuable and timely. Thank you for preparing and presenting this, despite the “rudimentary” averaging of numbers, your conclusion is what matters. I happen to agree with your conclusion, however, had I not agreed I would still have commended your decision to present the article. It is important to share such data/sentiments/opinions in a tangible format.

    From the outside, I’ve heard of a lot of the criticism the Premier and Government has received from a lot of the public; from the sidelines I’ve seen comments in the social media fora, and made my own. It’s clear that there is a broad sentiment which valued the continuation of life (“open up”, “life must go on”, “the economy will crash if we don’t”) more than the protection of life (“we have to be uber-protective until it’s safe to be less so”). To me, that in itself was disappointing from a common-sense and moral aspect – that many people would unquestionably put financial survival above all else, safety and life itself. But to each his own, that’s why were a diverse world and must accept that diversity.

    Good for the Government to hold out until this time of gradual easing of restrictions. Hopefully the latest measures aren’t too soon and results will be no more surprising or damaging than Government expects.

    Meanwhile, personal habits to protect oneself and others are all we can depend on. No question that social distancing, as best as can be applied under individual circumstances, and the wearing of appropriate protective gear in appropriate places will assist in keeping community transmission to a minimum. Each person must make genuine efforts to implement those safety measures when they interact with others. If that is done, as a general rule, that is the best we can expect.

    However, it will fundamentally take a generally different moral attitude and broad practices to reflect same for some people to respect one another in order to protect each other, and the community at large. Despite sentiments for urgent and full re-opening, “freedom” and resistance to wearing masks, etc. people with such sentiments MUST realize and respect that how they feel personally should not be enforced on others in their areas of circulation. One can maintain one’s feelings about those things but all I would like to see as a general attitude is when one is out in public where one interacts with others who are more cautious of their own safety, please be respectful and considerate and wear protective gear. No need to disregard the safety of others’ because one is a bit “cavalier” about one’s own safety, “freedoms” or rights. Respect the rights of others, also, who want to stay safe.

    Ultimately, with a weak (or worse) economy there would be perishing of sorts; with a full blown pandemic there would be perishing. However, as you have indicated the value of life, generally supersedes a financial component, as it should. Hopefully we would never become a society which is prepared to sacrifice lives for the economy, at whatever cost.

    Stay safe.

  2. Thank you for the article. It’s a very important discussion.

    Respectfully however, I don’t understand why this discussion is constantly being construed as a dichotomy. The notion that if you’re “for” opening the economy, you’re necessarily somehow “against life” is, in my opinion, deeply flawed and responsible for more confusion than debate.

    The response in the early days of confusion and panic should rightfully be applauded. The government acted swiftly and responsible – following the precautionary principle and ensuring that it gave the people the best chance possible in the face of what could have been a truly deadly pandemic.

    That said, the preponderance of data rolling in from around the western world – as their testing results have ramped up considerably – is that while infection rates are present, and climbing, the fatality rate and even symptomatic case counts are falling phenomenally short of what was originally predicted. The data suggests that those aged under 60 are incredibly resilient/resistant to this particular bug. The data suggests that the initial fears and uncertainties surrounding contagiousness and fatality rates for that demographic are orders of magnitude lower than initial concerns.

    If government had come to us in March with this new data – would we have acquiesced to such draconian lockdown measures in their entirety? I’m betting not. Which begs the question – what do we do going forward?

    As a civilized society, we value human life. Full stop. But that extends to all humans, not just those most at risk of this particular bug. I would argue that should be engaging in discussions about how to achieve both.

    Why aren’t we considering ways of controlling contact with the most vulnerable? We would surely have an army of volunteers that would enable contact-less solutions for the most at risk to receive groceries, supplies, socialization, etc – without resorting to the forced shutdown of civilization. Those least at risk are valued human lives as well – psychologically, physically, emotionally, economically – these are all equally important and valid “values” that collectively define a human life. To dismiss them so arbitrarily in a false dichotomy as the author of the article and the larger community seems to engage in – is an injustice to the majority of those not at risk and morally irresponsible given the data that we now have to hand.

    I would hope that this important discussion moves forward with more nuance and consideration for all life given the facts now available. Surely societies as dynamic, educated and innovative as ours can come up with better solutions to these novel problems we now face together without resorting to economic and social ruin.

  3. Economic ruin has hit Cayman’s most vulnerable, while Economic uncertainty has hit a high percentage of the Cayman populus in general.

    A 20% dip in GDP in 2020, will be followed by potentially another reduction in GDP in 2021 equal to 2020. The islands is NOT self sustainable.

    The GIC needs to open Tourism slowly, but it needs to buy into technology that aids in doing this …rapid testing kits, thermo-scans. Arrivals from destination airports that will be considered hubs of inclusion. This way you can control volumes of people and testing results. If you are not pre-screened and deemed a safe traveller, you can’t travel to the island. Cayman needs to define Countries of access, if Cayman is waiting on the U.S to be considered a safe travel nation, they may as well close the doors and throw away the keys. If Cayman is waiting on Dart and all developers to ramp up on their infrastructure programs, you might want to start begging them to employee all the remaining locals who are unemployed.

    The island has had 195 CC, 143 FR, 1 death (although this was an emergency distress due to a heart issue, elderly cruise passenger) and 20K plus samples tested. That is 1/3 of the Caymanian population tested, there should be zero cases period, this should have been a shut down slam dunk island, easily. Especially considering the HARD LOCKDOWN that was initiated.

    I have to agree with Steve, it’s time to quit congratulating your self’s on saving lifes, you’ve saved them. You now need to quickly concentrate on making sure the people, you the Government told could not work, have money to eat and keep a roof over their heads. I honestly have not seen that happen, 3 small token payments of $1000kyd, will not cut it.

  4. Great article Kevin,

    Not an easy conversation to have emotionally but logic demands considerations of the good of the many and the good of the few. Part of the conversation should also include the reality that Flu vaccines have extended the lives of many and as such when something like COVID-19 comes along and attacks those most vulnerable among us we must be thankful for the beauty of the extra time we have been given.

    I have seen it written that when asked many of the older generations would rather see their children flourish then have a few extra years on the earth isolated and estranged waiting for a vaccine that may never come in their lifetime.

    Thank you for having the courage to write this article.



  5. A useful article and it is important to discuss the cost benefit analysis of difficult moral decisions. Obviously, CINICO make these sort of calculations regularly when determining whether to pay for medical treatments.

    Kevin admits that his calculations are rough and ready, but they do include some fundamental methodological flaws. The exercise was designed to compare the costs of the lockdown to the benefits gained (in terms of lives saved). For these purposes “costs” need to reflect only the additional costs incurred by imposing the lockdown. Kevin has included the full cost of the Covid pandemic to the Islands GDP and ignored the fact that a large percentage of these would have been incurred whether or not the government imposed lockdown.

    As a prime example, virtually all lost revenue from tourism would have been lost in any event, due to actions by other governments in restricting travel, cruise ships not arriving and so on. These are costs of the pandemic, not of the lockdown itself.

    Lives saved by lockdown are more difficult to estimate, mainly because virtually all countries did impose some form of lockdown. The outlier here is Sweden, which continued life fairly normally, and ended up with a death rate of about 50 deaths per 100,000 of population. Had Cayman suffered a similar rate, we would have seen about 30 deaths, which is significantly different from the 910 assumed in the article.

    There are obviously wider cost benefit questions raised by the lockdown and the manner and timing of its lifting. A difficult one to quantify is the re-opening of schools, where we should be weighing up the increased Covid risks incurred by opening schools against the damage caused to children through missing out on their education. Government seem disinclined to discuss their thinking on this or justify why schools cannot be safely opened before September. This topic could form the basis for a future article.

    Hats off to the Compass for promoting discussion on these critical topics.

    Keep safe everyone,