To determine how to do good as cost-effectively as possible, it is necessary to estimate the value of bringing about different outcomes. We briefly outline the recent methods GiveWell has used to do this. We then introduce an alternative method – Well-Being Adjusted Life-Years, or ‘WELLBYs’ – and use it to estimate the values of two key inputs in GiveWell’s analysis: doubling consumption for one person for one year and averting the death of a child under 5 years old. On the WELLBY approach, outcomes are assessed in terms of their impact on subjective well-being – here, we use self-reported life satisfaction.
Our primary aim is to show that the WELLBY approach could be used, rather than that it should be used. Our estimate of the relative value of the two outcomes should be taken as preliminary rather than definitive.
We estimate the effects of doubling consumption using evidence from randomised controlled trials of cash transfers in Kenya conducted in collaboration with GiveDirectly. The total effect of the transfers is calculated by inferring an annual decay in life satisfaction. We include intra-household spillovers but exclude, due to mixed evidence, inter-household effects. To account for uncertainty in our model, we input 90% subjective confidence intervals and run Monte Carlo simulations.
The value of averting a death to the person whose death is averted is estimated on two philosophical views of death: deprivationism (the disvalue is the total lost life satisfaction) and the time relative interest account (TRIA) (the disvalue is total lost life satisfaction, discounted by the psychological connectedness to one’s future self). In effect, deprivationism holds it’s better to save 2-year-olds than 20-year-olds; TRIA the reverse. We also assess the effect of grief on family members using life satisfaction data.
These estimates rely on certain (implicit) philosophical assumptions. We note how different assumptions would substantially change the results and reduce the relative value of averting deaths. These issues are separate from how or whether to use WELLBYs; given different assumptions, one would simply calculate the WELLBYs differently. Our task is only to highlight the implications of (some) theories, rather than evaluate them.
Our model estimates that the value ratio of averting the death of an under-5 to doubling consumption of one person for one year is 154:1 on deprivationism, and 33:1 on TRIA. For reference, GiveWell currently uses a ratio of 100:1, based on a staff aggregate of 47:1 and an estimate of 230:1 from IDinsight’s beneficiary preference survey (described in the main text).
We close by setting out various uncertainties with the WELLBY estimate that are tractable with further research: the effects of cash transfers over time; spillover effects (of cash transfers and of deaths); the location of the ‘neutral point’ equivalent to non-existence; and the impacts assessed in terms of happiness rather than life satisfaction.
