Pedestrians walk through Federation Square in central Melbourne, Australia September 1, 2010. Reuters/Mick Tsikas/File Photo

If human lives could be priced, how much would it cost to save an Australian life? According to the Department of Prime Minister and Cabinet, the estimate cost of an Australian life is not more than $4.2 million on average.

Several factors come into play in determining the price of a human life. Some of these include a new road being designed, an expensive new drug that is introduced, determining compensation for wrongful death, and a new/modified safety regulation that is mooted.

According to the Department of Prime Minister and Cabinet, the research conducted for valuating a statistical life “has argued that the estimates will vary according to the characteristics of the people affected and the nature of the risk or hazard.”

As a result, younger people with more number of years to live will have more value of statistical life. Moreover, deaths that are more painful are likelier to receive more willingness to pay.

As measured in 2007, the Office of Best Practice Regulation estimated the value of statistical life and the value of statistical life year as $3.5 million and $151,000 respectively. With the use of CPI data, the value of statistical life for 2014 comes out as $4.2 million, while the value of statistical life year is calculated as $182,000.

There is more publicity received for an unusual death. This, in turn, receives more political pressure which results in disproportionate result, according to the Sydney Morning Herald.

According to Crickey’s Bernard Keane, “Terrorism kills fewer Australians than even the most exotic causes of death, yet we're obsessed with it.” In the last nearly four decades, there have been 113 Australian deaths from terrorism. However, he notes, almost 1,700 indigenous people died from diabetes in the period between 2003 and 2012 – almost seven times higher than non-indigenous Australians.

"If we'd invested a little of the money we spent going to war in Iraq or inflating the budget of the Australian Security Intelligence Organisation on programs that lowered indigenous diabetes to just twice that of non-indigenous Australians, around 1200 lives would have been saved, or around 10 times the death toll of terrorism,” Keane said.