Thursday, March 03, 2005

The cost of war in Iraq

I've seen articles on the value of human life from an actuarial and statistical point of view. Most people value their lives at $7-$10 million. The U.S. uses about 18 million barrels of oil a day. If you are able to decrease the price of oil by $1/barrel, it's worth (in statistical terms) about two lives per day -- less, if you figure the cost of transportation, training, and equipment.

Now, if you figure $200 billion dollars and 1500 lives (taking the higher $10 million price tag per life), this works out to the equivalent of $215 billion (or conversely, the equivalent of 21,500 lives) over two years. If we take current oil prices of $53/barrel (total around $700 billion over two years), then we should expect oil prices to be about 30% lower than they would be otherwise. Somehow, I don't think they are.


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