Calculating Compensation in Cases of Wrongful Death

Arthur Lewbel

No 523, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: Death statutes in the United States list elements of loss for which a defendant must make compensatory payment. The element that economists as expert witnesses are called upon to calculate is net income, roughly defined as the decedent's income minus personal expenses. The existence of joint or shared consumption goods complicates the definition and calculation of net income. Net income can be interpreted as the money required for survivors to attain the same standard of living as before. Equivalence scales traditionally used for this type of calculation are flawed. A new method for calculating net income is proposed, based on a collective household model.

Keywords: wrongful death; death statutes; adult equivalence scales; consumer demand; household bargaining; insurance. Classification- JEL:K1; D1; J17; C30; I31 (search for similar items in EconPapers)
Date: 2002-01-15, Revised 2002-06-07
New Economics Papers: this item is included in nep-hea and nep-law
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Journal Article: Calculating compensation in cases of wrongful death (2003)
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