How economists think
Source Robert Naiman
Date 07/04/14/19:03

contingent valuation and undercounting the cost of the surge

SOME OF YOU ARE familiar with the contingent valuation literature,
cost-of-commuting literature, and so on, so I thought to ask the

It occurs to me, reflecting on the Pentagon's decision to extend Army
deployments from 12 to 15 months, that the U.S. social cost of the
"surge" is being undercounted. Of course there is a dispute between
Congress and the Administration about the true financial cost to the
government; and that's just current appropriation cost, it doesn't
count the future implied costs like caring for more soldiers with
brain injuries that Stiglitz and Bilmes have called attention to.

But even the Stiglitz/Bilmes considerations lead to an undercount of
the social cost since it just considers the financial costs. (S/B
consider other things besides costs to the govt, like increases in the
price of oil.)

In particular: what is the uncompensated cost to soldiers and their
families of three months' additional deployment?

Clearly, it's not zero. Being stationed in a combat zone entitles you
to combat pay, but if this fully compensated for the additional
deployment, soldiers and their families would be indifferent between
having their deployments extended or not. Skimming the press coverage
on military families' reactions to the extended deployments, I think
we can rule that out.

Has anyone looked at this?

If not, how could we estimate it?

We could look at the gap between the combat pay and what these
soldiers would be earning if they remained in the U.S. Clearly not the
right number, but a number worth knowing.

We could look at the cost of life literature and say that being
additionally deployed is like losing 3 months of your life. Clearly
this would be an overestimate, because you get to do some being-alive
things while you're deployed, like receive letters from your family,
but I think everyone would agree that the average soldier who is
additionally deployed loses a huge chunk of their "being-alive"
benefit. And then there is the risk of death and serious injury and
fear of same which we know is not going to be anywhere near fully

We could look at the cost-of-commuting literature. That, presumably,
would give us an underestimate.

We could look at the criminal justice literature. Surely some
"conservative" economists, arguing for longer prison sentences as a
deterrent to crime, have come up with an estimate of the cost of being
in prison.

And we could look at the contingent valuation literature. Surely,
somewhere in there, young, able-bodied people have been asked a
question similar to, how much would we have to pay you to deprive you
of freedom for three months? How much would you pay to avoid such an

Ideas? References?

P.S. When Union soldiers bought their way out of the Civil War, how
much did they pay?

P.P.S. When Americans went to college to get draft deferments during
Vietnam, how much did they pay to do so? (There was that study that
showed a spike in enrollments corresponding to birthdays/draft

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