Death, Happiness, and the Calculation of Compensatory Damages

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 16.10.2008, 12:15 - 13:30


Presentation by 

Andrew J. Oswald (University of Warwick)


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 someoneís marginal utility of income, and suggest a procedure for correcting for the endogeneity of income. Although the paperís contribution is methodological, and further research is needed, some illustrative compensation amounts are discussed.

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