![]() ![]() The studies examine the value of reduced risk, not life itself. In fact, linking reduction-of-risk studies to the value of life flunks the basic common-sense test. To say that these studies reflect the actual value of life, however, mischaracterizes their intent. Smith and Brookshire, Economic / Hedonic Damages: The Practice Book for Plaintiff and Defense Attorneys (1990).Įconomists have long studied willingness to pay for reduction of risk. In effect, if 5,000 people spent $700 each on air bags, one life would be saved at a total cost of $3,500,000. By reducing his chance of dying by 2/10,000ths, or one chance in 5,000 at a cost of $700, economists would say that he valued his life at $3,500,000. Here is how Smith explains the rationale behind his value-of-life measurement:Īssume that a person purchases a safety device for $700 and that device reduces the probability of his death from 7 in 10,000 to 5 in 10,000. The jury awarded $850,000 in “hedonic” damages and an industry was born. Smith first testified on the monetary value of a human life in Sherrod v. He then claimed the ability to scientifically calculate the value of an individual life. ![]() He posited that basing damages in wrongful-death matters on earning capacity alone results in an incomplete picture of loss - life is worth more than what a person earns over a lifetime. In the 1980s, an economist named Stan Smith came up with a novel theory. Amazingly, they are appearing in matters that at first, second or even third glance would seem totally inappropriate for testimony on life’s value - torts involving neither death, nor physical injury, nor even pain and suffering, but purely economic claims, such as lender-liability and employment matters.īefore outlining the inappropriate areas where hedonic testimony is now being applied, and before noting some new evidence that such testimony may be even more inappropriate than economists heretofore thought, some background. Despite repeated stakes through the heart of hedonic-damages testimony - studies showing that the theory is unreliable, new evidence showing that the basis for such testimony in injury cases is nonexistent, and numerous successful motions-in-limine barring such testimony - the economic hedonists are still with us.
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