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Death, Happiness, and the Calculation of Compensatory Damages

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  • Oswald, Andrew J.

    ()
    (University of Warwick)

  • Powdthavee, Nattavudh

    ()
    (London School of Economics)

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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3159.

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Length: 44 pages
Date of creation: Nov 2007
Date of revision:
Publication status: published in: Journal of Legal Studies, 2008, 37(S2), S217-S252
Handle: RePEc:iza:izadps:dp3159

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Related research

Keywords: well-being; GHQ scores; compensation; happiness; damages; bereavement;

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References

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  1. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(445), pages 1815-31, November.
  2. Luis Rayo & Gary S. Becker, 2007. "Evolutionary Efficiency and Happiness," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 115, pages 302-337.
  3. Michael A. Shields & Stephen Wheatley Price, 2005. "Exploring the economic and social determinants of psychological well-being and perceived social support in England," Journal of the Royal Statistical Society Series A, Royal Statistical Society, Royal Statistical Society, vol. 168(3), pages 513-537.
  4. Nattavudh Powdthavee, 2003. "Unhappiness and Crime: Evidence from South Africa," Development and Comp Systems 0310003, EconWPA, revised 17 Mar 2004.
  5. DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 1999. "The macroeconomics of happiness," ZEI Working Papers B 03-1999, ZEI - Center for European Integration Studies, University of Bonn.
  6. Ada Ferrer-i-Carbonell & Bernard M.S. van Praag, 2002. "The subjective costs of health losses due to chronic diseases. An alternative model for monetary appraisal," Health Economics, John Wiley & Sons, Ltd., vol. 11(8), pages 709-722.
  7. Nattavudh Powdthavee, 2007. "Are there Geographical Variations in the Psychological Cost of Unemployment in South Africa?," Social Indicators Research, Springer, Springer, vol. 80(3), pages 629-652, February.
  8. Betsey Stevenson & Justin Wolfers, 2003. "Bargaining in the Shadow of the Law: Divorce Laws and Family Distress," NBER Working Papers 10175, National Bureau of Economic Research, Inc.
  9. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
  10. Cooter, Robert D., 2003. "Hand Rule Damages for Incompensable Losses," Berkeley Olin Program in Law & Economics, Working Paper Series, Berkeley Olin Program in Law & Economics qt5rf3f1m2, Berkeley Olin Program in Law & Economics.
  11. Bernard M.S. van Praag & Barbara E. Baarsma, 2004. "Using Happiness Surveys to Value Intangibles: The Case of Airport Noise," CESifo Working Paper Series 1163, CESifo Group Munich.
  12. Oswald, Andrew J. & Powdthavee, Nattavudh, 2008. "Does happiness adapt? A longitudinal study of disability with implications for economists and judges," Journal of Public Economics, Elsevier, Elsevier, vol. 92(5-6), pages 1061-1077, June.
  13. Wim Groot & Henri�tte Maassen van den Brink & Erik Plug, 2004. "Money for health: the equivalent variation of cardiovascular diseases," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 859-872.
  14. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(424), pages 648-59, May.
  15. Menzel, Paul & Dolan, Paul & Richardson, Jeff & Olsen, Jan Abel, 2002. "The role of adaptation to disability and disease in health state valuation: a preliminary normative analysis," Social Science & Medicine, Elsevier, Elsevier, vol. 55(12), pages 2149-2158, December.
  16. Shields, Michael A. & Wheatley Price, Stephen, 2001. "Exploring the Economic and Social Determinants of Psychological and Psychosocial Health," IZA Discussion Papers 396, Institute for the Study of Labor (IZA).
  17. Sunstein, Cass R & Schkade, David A & Kahneman, Daniel, 2000. "Do People Want Optimal Deterrence?," The Journal of Legal Studies, University of Chicago Press, University of Chicago Press, vol. 29(1), pages 237-53, January.
  18. David G. Blanchflower & Andrew J. Oswald, 2000. "Well-Being Over Time in Britain and the USA," NBER Working Papers 7487, National Bureau of Economic Research, Inc.
  19. Jonathan Gardner & Andrew J. Oswald, 2006. "Do divorcing couples become happier by breaking up?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, Royal Statistical Society, vol. 169(2), pages 319-336.
  20. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The economics of bereavement
    by Chris Sampson in The Academic Health Economists' Blog on 2013-06-20 05:59:52
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