Forensic Economics: Assessing Personal Damages in Civil Litigation

Economic DamagesRole of the EconomistOther ConsiderationsLoss of ServicesCommunication Skills and Professional StandardsTiming of Expert EngagementThe Expert’s AssignmentConcluding ThoughtsNotesReferencesThe Meaning of Earning CapacityIntroductionDefinitionsSupply and DemandThe Supply SideThe Role of PreferencesThe Demand SidePrinciples of Measuring Impairment to Earning CapacityPrinciple 1: SymmetryPrinciple 2: Non-binding ChoicePrinciple 3: History and MaximizationPrinciple 4: Existence of Supply and DemandSummaryNotesReferencesEvolution of Worklife Expectancy MeasurementIntroductionHistorical Development of Worklife ExpectancyCurrent (Markov) Model and Conventional ModelsSpecificationSample PathsComputation of WLE by Forward Recursion and DecompositionDemographic Exposition of WLEBackward Recursion and Probability Mass FunctionsBootstrap and Standard ErrorsSpecific Populations: Multiple Decrements and/or Unique Transition ProbabilitiesVariantsLower Order (LPE)Higher OrderOther Variants: Logit Instead of Relative Frequency EstimatesOther Variants: More or Different StatesFront-Loading and Uniform LoadingTemporal Comparison of WLE EstimatesDisabilityFuture ResearchNotesReferencesPersonal Consumption and Wrongful Death DamagesIntroductionNormative Decision-Making About Wrongful Death DamagesIncome-Related DamagesWealth EffectsIncome EffectsDefining Personal Consumption ExpendituresAllocating Personal ConsumptionOther Personal Consumption Measurement IssuesContingent Wrongful Death DamagesEstimates From the Consumer Expenditure SurveyConsumption-Based Estimates of Wrongful Death DamagesConclusionNotesReferencesEstimating Educational Attainment and Earning Capacity of a Minor ChildIntroductionEducational Attainment Model HistoryThe Educational Attainment ModelUsing the Educational Attainment ModelAge-Earnings Base Year ProfilesWorklife ExpectancyEarnings EstimatesEducation ProbabilitySelf-Consumption in Personal Injury with a Life Care PlanConclusionNotesReferencesIncorporating Fringe Benefits in Loss CalculationsIntroductionWhy Do Firms Offer Voluntary Fringe Benefits to Employees?Types and Cost of Employer-Provided Fringe BenefitsInformation Needed to Value Employer-Provided Fringe BenefitsValuing Fringe BenefitsValuing Fringe Benefits When There Is Limited InformationValuing Fringe Benefits When an Employed Person Is InjuredValuing Fringe Benefits When an Employed Person Is KilledConclusionNotesReferencesFederal and State Income Tax Aspects in Forensic EconomicsIntroductionPersonal Injury and Wrongful DeathLegal and Jurisdictional ConcernsTax Implications in the Practice of Forensic EconomicsEmployment Discrimination and Wrongful TerminationLegal BackgroundTax Implications in the Practice of Forensic EconomicsAward Gross Up and Jurisdictional Legal ConcernsConclusionReferencesIssues in Applying Discount RatesIntroductionInterest (R)Growth Factor (g)Net Discount RateBasis for Selecting RatesReferencesPotential Effects of the Affordable Care Act on Loss CalculationsIntroduction and Background on the Affordable Care ActHealth Insurance for Those with Preexisting Conditions Before and After the ACAThe ACA and Medical InflationImplications of the ACA when Estimating the Cost of a Life Care PlanApplying the ACA to a Life Care Plan: An ExampleIssues Still to Be ResolvedCourt Treatment of the Affordable Care ActConclusionNoteReferencesChallenges in Valuing Loss of ServicesIntroductionTypes of ServicesThe Quantity of Services ProvidedThe Monetary Value of ServicesConcluding ObservationsNotesReferencesIssues in Employment Litigation AnalysisIntroductionTime PeriodsPast Loss PeriodFuture Loss PeriodAssumed DurationsDuration of Employment with DefendantDuration of UnemploymentCompensationProjected Compensation with Defendant EmployerQualifying Mitigation IncomeDiscounting Future Losses to Present ValueAdverse Tax ConsequencesWorker Characteristics: AgeConclusionNotesReferencesDifferences Among State Court Jurisdictions in Damages CalculationsIntroductionThe Court System and Basic Legal StructureWrongful Death and Survival ActionsPersonal InjuryMiscellaneous IssuesConclusionReferencesForensic Economists and Their Changing Viewpoints Over TimeIntroductionBasic Variables in Projecting Economic LossInterest Rate and Portfolio IssuesSelf-ConsumptionHousehold ServicesWorklifeThe Cost of Life Care PlansOther Damages CategoriesOther Practice and Industry IssuesConclusionNotesReferencesHedonic Valuation IssuesWhat Is the Value of a Statistical Life?Theoretical Exposition of VSL: Three Simple ModelsMeasurement of VSLEconometric SpecificationVSL ResultsValue of a Statistical InjuryVSL and Law and Economics Considerations: Compensation and EfficiencyMisleading NameVSL Applicability in Forensic EconomicsConclusionNotesReferencesEthical Dimensions of Forensic EconomicsPressures to Act UnethicallyUnethical Behavior and Its MotivationsLawyers’ Relations with Expert WitnessesEthics-Enhancing Mechanisms in Tort LitigationConclusionNotesReferencesUnderstanding Law as a Part of Forensic Economic PracticeIntroductionWhy Law Restricts Economic ExpertiseQuestions to Ask When Working in a New StateA. General QuestionsB. A Sample of Questions for Particular Types of CasesConfronting Legal Citations in the Reports of Opposing Economic ExpertsLegal Decisions in Reports Involving Hedonic DamagesThe Importance of Reading and Re-Reading the Pfeifer DecisionFootnote 22 of the Pfeifer DecisionReferencesEffective Communications as a Forensic EconomistIntroductionCommunicating with Attorney/ ClientsCommunicating by Means of a Written ReportCommunications During a Discovery DepositionTrial Testimony CommunicationsConclusionReferenceReflections on the 9/11 Victim Compensation FundBackgroundThe Role of the National Association of Forensic Economics (NAFE)Economic Calculations Under VCF RulesThe Viability of a VCF System for Other Mass TortsA Note on the 2013 Boston Marathon BombingsReactivation of the VCFConcluding ObservationsNotesReferencesDifferences Among Nations in Measuring Economic DamagesIntroductionSources of Data for International Damages ClaimsIssues of Efficiency, Predictability and EquityJury Trials, Contingency Fees and Collateral SourcesScheduled Damages and Multipliers in Lieu of an Expert WitnessConclusionReferences
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