Death and the calculation of hedonic damages – Preliminary draft for a June 1-2 workshop at the University of Chicago –

Abstract

This paper studies the mental distress caused by bereavement. We find that 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; third-worst is the death of a parent. The paper demonstrates how happiness equations might be used in tort cases to calculate hedonic damages. We examine alternative well-being variables, discuss adaptation, and suggest a procedure for correcting for the endogeneity of income.