Hedonic damages

Hedonic Damages, an economic term of art, refers to loss of enjoyment of life damages, the intangible value of life, as distinct from the human capital value or lost earnings value.

Stan V. Smith (economist), a Ph.D. graduate from the University of Chicago, first coined the term "hedonic damages" in the case of Sherrod v. Berry, 827 F.2d 195 (7th Cir. 1987). and testified as an expert witness in regards to the amount of the hedonic award, the first such testimony proffered nationwide. It has since been in widespread use in subsequent legal decisions, in law review articles, and in law and economics articles nationwide. See for example Profession Cass Sunstein's University of Chicago Law & Economics, Olin Working Paper No. 340, July 2007. Such testimony has been admitted in state and federal court hundreds of times nationwide, increasingly gaining acceptance over past decades. Trained at the University of Chicago, Dr. Smith has published numerous peer-reviewed Journal articles on hedonic damages including research completed for his dissertation supervised by Nobel Laureate Gary Becker. Becker and his blog colleague Federal Appellate Judge Richard Posner both advocated the use of economic literature on the value of life in litigation. Dr. Smith also co-authored the first textbook on Hedonic Damages in 1990, published by Anderson Publishing, Ohio

Hedonic damages, the loss of the value of life, are allowed in almost every state in a non-fatal injury case. Based on William Daubert et al. v. Merrell Dow Pharmaceuticals, Inc., and other admissibility tests, many but not all jurisdictions allow economic expert witness testimony on hedonic damages. For example, the Nevada Supreme Court unanimously approved of such testimony in Banks v. Sunrise Hospital, 120 Nev. 822, 102 P.3d 52 (2004). Similarly, the 4th Appellate District in Ohio allowed such testimony based on Daubert in Lewis v. Alfa Leval,128 Ohio App.3d.200 (1998). The Court of appeals in the Lewis case held that the trial judge properly ruled that the testimony met the Daubert Standards, and that it was within the discretion of the trial court to have admitted hedonic damages testimony. The measurement of hedonic damages is based on some 40 years of extensive, well-accepted, peer-reviewed, economic research on the value of a statistical life (VSL). This measurement is controversial among forensic economists. The Value of Statistical Life literature is accepted by most forensic economists, including those economists few who oppose the admission of hedonic damages testimony. Many courts nationwide have allowed such testimony but judges have significant discretion as to its admissibility. Economists generally agree that the VSL is in the $4 million to $5 million range. This value is an average of many published results based on economic research using the Willingness-to-Pay model(WTP). Hedonic damages are not allowed in death cases in the great majority of the states. Some states do allow recovery in wrongful death cases, including New Hampshire, New Mexico, Georgia, Arkansas, Connecticut, Hawaii, and in Federal Section 1983 civil rights violation actions.

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