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Death, Happiness, and the Calculation of Compensatory Damages

Andrew Oswald and Nattavudh Powdthavee

No 3159, IZA Discussion Papers from Institute of Labor Economics (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: well-being; GHQ scores; compensation; happiness; damages; bereavement (search for similar items in EconPapers)
JEL-codes: D1 I3 I31 K0 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2007-11
New Economics Papers: this item is included in nep-hap, nep-hea, nep-law and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Published - published in: Journal of Legal Studies, 2008, 37(S2), S217-S252

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Journal Article: Death, Happiness, and the Calculation of Compensatory Damages (2008) Downloads
Working Paper: Death, Happiness, and the Calculation of Compensatory Damages (2007) Downloads
Working Paper: Death, Happiness, and the Calculation of Compensatory Damages (2007) Downloads
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