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Human Life is Undervalued in Russia

The average value of a statistical life in Russia stands at some $1.6 million, which is eight times less than in the U.K. and four times less than in the U.S. In countries where little value is attached to individual lives, the state is sending a signal that it is not planning to invest substantially in efforts to improve the life expectancy and safety of its citizens, conclude Tatiana Karabchuk, Marina Nikitina, Victoria Remezkova, and Natalia Soboleva in a paper published in the HSE's Economic Sociology journal

Russia's human development index is similar to that of Romania and Kuwait.

But the value of a statistical life in Russia is very low and comparable to that of developing Asian countries.

The low estimated value of human life is reflected in insurance indemnities and accident damage estimates which tend to belower in Russia than in many other countries.

A low valuation of human life has social and economic implications: where little value is attached to individual lives, the state is sending a signal that it is not planning to invest substantially in efforts to improve the life expectancy and safety of its citizens.

Research indicates that a high estimated value of human life in a country is associated with an overall sense of security and stability in society, as insurance mechanisms are in place to mitigate risks and to give people confidence in the future. Deputy Head of the HSE Laboratory for Comparative Social Research (LCSR) Tatiana Karabchuk, Chief Specialist of the Gazpromneft-Lubricants Company HR Division Marina Nikitina, LCSR Research Intern Victoria Remezkova, and LCSR Research Fellow Natalia Sobolyeva have reviewed the most common approaches to estimating the value of a human life.

According to the authors, by measuring the value of a human life, important information is generated for policy decisions such as establishing adequate amounts of compensation to the families of victims killed in accidents, natural disasters, terrorist attacks, and other emergencies. This information is also important for governments when establishing relevant safety procedures, public health policies, and providing emergency services. In addition to this, a valuation of a human life is necessary for life and health insurance purposes.

The Value of Labour And the Value of an Individual

There are two main approaches to assessing the value of a human life:

  • through the concept of human capital by looking at the value of a person as an employee;
  • through the analysis of individual decisions which involve a quantitative assesment of the value of one life. In this case, the value of life can be measured based on how much consumers are prepared to pay for an enhanced-security car or to what extent the wages of employees working in hazardous conditions are higher than average wages.

No single method of human life valuation is established in Russia; nevertheless, the above approaches have enabled the authors to come up with rough estimates for Russia and to make cross-country comparisons.

Human Capital Is Growing

Karabchuk, Nikitina, Remezkova, and Soboleva used the human capital approach and found that "the average Russian person has assets standing at approximately 6 million rubles," while the total value of human capital in Russia exceeds 600 trillion rubles. Men, younger people, and people with higher levels of education tend to have higher human capital. In terms of human capital, Russia is behind industrially-developed nations, such as the U.S., but is far ahead of other post-socialist countries, such as Poland or Romania.

Russia's human capital more than doubled between 2002 and 2010. The authors refer to research by Rostislav Kapelyushnikov who explains in one of his papers that "the main driver behind the increasing value of Russia's human capital was the rapid real-wage growth observed throughout the 2000s."

"The human capital theory emphasises the value of an individual as an employee while ignoring other aspects of human life. Awareness of this gap has lead to alternative methods for measuring the value of a human life," the authors note.

It Does Not Get Any Cheaper

Local legislation reflects the low value of human life in Russia. Compensation paid to families of victims killed in tragedies can vary between one and three million rubles per person.

For example, 327,000 rubles was paid to the families for each victim killed in the Dubrovka Theatre siege in October 2002, one million for each victim of the September 2005 Beslan School crisis and the 2010 Moscow Metro bombings, and three million for each victim of the Domodedovo Airport terrorist attack.

Estimates Are Based on Many Variables

Life insurance, however, is not always a solution, since the value of insurance indemnities in Russia may vary considerably – from 30 million to 150 million rubles – based on many different factors, such as:

  • the term of the insurance (5 years, 20 years, or more);
  • the extent of damage to health;
  • age, gender, lifestyle, occupation, and health status. Women, for example, pay lower insurance premiums than men due to statistically longer life expectancy, while men over 40 are considered a high-risk category and have to pay about 10% more for their life insurance.

A fair estimate of human life value in Russia should be much higher than the legally-required compensation for lives lost in workplace and transportation accidents. For example, in the event of an employee death, the Social Insurance Fund pays the family 64,400 rubles, while the family of a driver killed in a car accident will receive a maximum of 160,000 roubles under an OSAGO insurance policy. Air carriers pay two million rubles to families for each plane crash victim.

A February-March 2013 study by the Rosgosstrakh Insurance Company's Centre for Strategic Studies estimated the value of a human life in Russia at 3.6 million rubles, and the cost of a total disability caused by an accident at 3.4 million rubles.

In addition to conventional methods of valuing human life, the authors mention less common approaches – such as the price of contract killings or the costs of surrogate motherhood. However, these measures vary from case to case. Karabchuk and her colleagues only note that in 2007 and 2008, surrogacy costs ranged from a few thousand to hundreds of thousands of dollars in Moscow and St. Petersburg.

A Russian Is Valued at Eight Times Less Than an Englishman

The authors estimate that the average value of a statistical life in Russia is about 50 million rubles, or some $1.6 million, which is extremely low and comparable to that of developing Asian countries, while the average human life is valued at $6.7 million in the U.S., at $13 million in the U.K., at $11.9 million in Japan, and at $5.9 million in Sweden."The value of a human life in Russia is significantly underestimated," the authors conclude.


March 24, 2014