Emotional Dollars

Greg Mankiw got me thinking about death…

Over all, each hour spent exercising (up to 30 hours a week) adds about two hours to a person’s life expectancy, according to the Harvard Alumni Study, which has tracked deaths among 17,000 men for more than two decades.

This sounds like a good deal. But there are two problem with this information, both of which are familiar to economists.

The first problem is discounting. The cost of exercise is paid today. The benefit of a longer life is obtained at the end of life–at my age, about 30 or 40 years from now. Even with a discount rate of 3 percent, that two hours of future benefit is worth less in present value than the one hour of present cost.

But as I wrote in his comments:

I’m definitely confused, because I see death as a very large “debt that comes due” when I die, but with no interest. Shouldn’t that debt be factored into your equation, thus creating a cost that you would want to postpone? Maybe the direct cost is to your family and friends, and not to you, but there is an emotional cost to you, knowing that they will be sad in the future.

So, more generally:

  • Unlike traditional economics, Emotional costs and benefits often accrue to other people directly.
  • The impact of those costs and benefits “trickle down” back to you

For example – when you die, that will create an economic cost to your friends and family.  While you will not be there to directly suffer, you can certainly foresee that cost, and, in most cases that future cost causes you emotional distress now.

Thought experiment:

Right now, if you die, you’ll create an emotional cost of $5,000,000 Emotibucks, representing the grief suffered by your family and friends

But you are a nice person, you are thoughtful with your friends and family, and every hour that you are alive, you reduce that emotional debt by, say, $5 Emotibucks.    Which means that if you live for another 114 years, you will have paid off the cost completely – in essence “He/She lived a good, full life and we should not weep, blah blah blah”

Now, an assumption: You want to minimize the emotional debt you incur in your friends and family?  Why?  Prisoner’s dilemma – you don’t want them to die and incur emotional debt in you.  Kinda morbid, I know.  But run with it for a bit.  (interestingly, the “optimal case” is for every single human to die at the same time to absolutely ensure no emotional debt is incurred)
So, recognizing that you have an incentive to live long enough to pay off that debt, some interesting thoughts apply:

  • You want to live as long as you can, up to the point where you pay off the emotional debt
  • You want to maximize your “hourly payment” against the debt, so it will get paid off as soon as possible.

How do you pay off the debt?

Well, we know from real world experience that if one lives a life full of adventure and good deeds, people seem to feel that the deceased “lived a full life, and should not be mourned”, thus generally minimizing the debt.  And for certain, the longer you live, the less people seem to be sad when you pass, for generally the same reason.  see: Secondhand Lions.

Which suggests that a life of adventure and good deeds pays better than $5 Emotibucks/hour.

The problem, of course, is how much more?  I don’t know.  But I do know that there are people who die in their 70s who are generally considered to have lived a full life.  So if you lived for 70 years, and paid $5 million emotibucks, you’ve been paying it down at $8 emotibucks/hour on average.

So, at this point, if you live a life of adventure and good deeds, and exercise, you are both maximizing your payments, and simultaneously increasing the amount of time you have available to make payments. And, most importantly, knowing that you are doing those things should create a sense of emotional goodwill in yourself, which at the end of the day, is the most concrete aspect of this entire thought experiment.

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