Can we quantify life’s value? It is the economist’s job to reveal the implicit price society puts on life based on extensive research. Many studies show that when the income component is known, the hedonic component can be shown. The hedonic damages model is a concrete measure of the value of life, separate from lost earnings capacity.

One of the more difficult tasks facing jurors is to place a dollar value on loss of enjoyment of life in wrongful death and nonfatal injury cases. Such losses have recently become known as hedonic damages. Absent economic testimony, ac hoc valuation methods commonly used by juries in place of accurate hedonic damages estimations rarely result in equal justice under the law.

Everyone wants a fair and neutral economic assessment when determining plaintiff awards in personal injury and wrongful death cases. Bias can easily be manipulated to favor either plaintiff or the defense, and economists who use bias in several factors can waylay an entire jury unless effectively checked. Even modest biases in any one factor can lead to significant biases in the overall result.

Much of the sentiment for tort reform on the value of life has been stimulated by the rare but newsworthy “runaway” verdicts. While damages for measuring the loss of enjoyment of life have been widely argued for decades, juries relied mainly on ad hoc methods to award plaintiff’s in injury and wrongful death cases. More recently, claims for such damages have been supported by the testimony of economists who provide objective information on the loss of enjoyment of life, or hedonic damages, resulting in more accurate awards based on the life values established by hedonic valuation.

Economic testimony on the value of life is becoming increasingly common. Testimony on hedonic damages can produce more consistent and rational jury verdicts. It can reduce the wide variability of awards which contributes to the current win/lose lottery effect of personal injury lawsuits. This encourages settlements rather than trials, and thereby reduces litigation and insurance costs. These are results we could all live with.

Relied upon by economists to calculate the loss of enjoyment of life damages in personal injury and wrongful death cases, value of life literature in economics serves to provide estimates for the loss of society and companionship as a result of the death of a close family member.

Great controversy once surrounded Stanley V. Smith’s theory of hedonic damages when it was first introduced to the world of legal economics in personal injury and wrongful death lawsuits. Hedonic damages theory is used to help determine the valuation of life by providing rough guidelines for valuing lost pleasure beyond a person’s worth in relation to their job/work.

The increased use of economic experts in commercial damage cases, as well as in personal injury and wrongful death cases, has resulted in the emergence of a group of experts who offer economic services but are unqualified and ill-trained in economics.

There wasn’t always a standard formula for calculating future lost wages when a plaintiff suffered a loss of enjoyment of life or hedonic damages. Before this methodology became standard practice in injury and wrongful death trials, economists faced an uphill battle to ensure fair settlements for plaintiffs in personal injury cases.

In a personal injury case, juries may be asked to consider the loss of the pleasure of life. Economists and financial experts sometimes testify in this area, but a reliable system for rating and quantifying such damages in personal injury cases has not been developed and communicated. An interdisciplinary approach for applying hedonic valuations establishes a foundational model.