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Death, Happiness, and the Calculation of Compensatory Damages

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  • Andrew J. Oswald
  • Nattavudh Powdthavee

Abstract

This paper presents a study of the mental distress caused by bereavement. The greatest emotional losses are from the death of a spouse, the second greatest from the death of a child, and the third from 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. (c) 2008 by The University of Chicago. All rights reserved.

Suggested Citation

  • Andrew J. Oswald & Nattavudh Powdthavee, 2008. "Death, Happiness, and the Calculation of Compensatory Damages," The Journal of Legal Studies, University of Chicago Press, vol. 37(S2), pages 217-251, June.
    • Handle: RePEc:ucp:jlstud:v:37:y:2008:i:s2:p:s217-s251
    DOI: 10.1086/595674
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    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • K0 - Law and Economics - - General

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