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Death, Happiness, and the Calculation of Compensatory Damages

Author

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  • Oswald, Andrew J.

    () (University of Warwick)

  • Powdthavee, Nattavudh

    () (University of Warwick)

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.

Suggested Citation

  • Oswald, Andrew J. & Powdthavee, Nattavudh, 2007. "Death, Happiness, and the Calculation of Compensatory Damages," IZA Discussion Papers 3159, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3159
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    References listed on IDEAS

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    More about this item

    Keywords

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

    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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