Economists have put a price on pain, and it’s $56-$145 a day

Even pain has its price.
Even pain has its price.
Image: Reuters/Eric Gaillard
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Economists can put a dollar value on anything. Even pain.

In a recently released working paper (paywall), economists from the University of Iceland and the University of Michigan set out to quantify just how much it’s worth to people to live a life without pain. They estimate that for people in the US age 50 and older, avoiding chronic pain is worth somewhere between $56 and $145 a day.

The act of putting a monetary value on pain might seem ridiculous. It’s not. As the researchers point out, since governments pay partly or fully for health care in many countries, they have to compare the value of money spent on providing and researching pain relief to the value of other spending priorities, such as improving highways. And to quantify the value of pain-relief research, you have to know how much pain relief is worth to people with pain.

Usually, economists rely on markets to tell them the values of things. A researcher can get a pretty good sense of how much people value coffee just by going to Starbucks. But because chronic pain relief is usually not provided in a market setting, researchers have to be more creative.

One possible way to estimate the value of pain relief would be to ask people directly. Yet this question doesn’t elicit sensible responses because the question feels so bizarre to people, write the study’s authors. Instead, their methodology relies on the economic idea of “compensating variation.”

Compensating variation means the amount of money that someone who has had an object or service taken away would need to be given to return her to her previous level of happiness. To determine how much this is, the economists used survey data from the US Health and Retirement Study. The data include people’s incomes, whether they report experiencing chronic pain (either mild, moderate or severe), and a measure of life satisfaction on a scale of 1 to 5.

As you might expect, a higher income is associated with higher life satisfaction, and chronic pain is associated with lower life satisfaction.

The researchers used the data to calculate how much more income a person who started to experience chronic pain would need in order to report having the same life satisfaction they had before the pain started. That led them to be confident in an estimate in the range of $56 to $145 a day. They gave a wide range because the exact number depends on such questions as whether to treat people of all income levels equally or analyze people with different income levels separately and then average the results. Wealthier people, unsurprisingly, were willing to pay more to be rid of their pain.

As a result of aging population, chronic pain is due to become an increasingly important global issue. Yet many other problems in the world compete for funding—poverty, lack of education, environmental pollution. Understanding just how much a pain-free life is worth will help governments decide how much to spend on providing one.