Death, Happiness, and the Calculation of Compensatory Damages

Andrew J. Oswald and Nattavudh Powdthavee ()

No 3159, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: This paper studies the mental distress caused by bereavement. The largest emotional losses are from the death of a spouse; the second-worst in severity are the losses from the death of a child; the third-worst is the death of a parent. The paper explores how happiness regression equations might be used in tort cases to calculate compensatory damages for emotional harm and pain-and-suffering. We examine alternative well-being variables, discuss adaptation, consider the possibility that bereavement affects someone’s marginal utility of income, and suggest a procedure for correcting for the endogeneity of income. Although the paper’s contribution is methodological, and further research is needed, some illustrative compensation amounts are discussed.

Keywords: bereavement; damages; happiness; compensation; well-being; GHQ scores (search for similar items in EconPapers)
JEL-codes: D1 I3 I31 K0 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hap, nep-hea, nep-law and nep-ltv
Date: 2007-11
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Related works:
Working Paper: Death, Happiness, and the Calculation of Compensatory Damages (2007)
Journal Article: Death, Happiness, and the Calculation of Compensatory Damages (2008)
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