David DePianto, ‘Health, Happiness and Tort Damages – A Look at the Broader Empirical Picture’

Abstract:

What does the empirical study of well-being, or happiness research, imply for damage awards in tort? The current consensus on the issue is that, in light of adaptation, current damage awards are likely inflated from a hedonic perspective. If juries properly accounted for the remarkable ability of individuals to adapt to their circumstances, the argument goes, then injuries initially defined by decreases in well-being would be largely defined away by the eventual hedonic rebound. A look at the broader empirical literature on well-being, however, complicates this picture. That is, while claims about the damage-reducing potential of adaptation may be true as far as they go, the current literature has overlooked other, potentially offsetting errors that juries may make in translating hedonic losses into damage awards.

Chief among those errors is a common misunderstanding about the amount of well-being a particular amount of money will bring to a plaintiff. Money just doesn’t ‘buy’ as much happiness as people often think, and the courtroom context – by making the restorative powers of money psychologically salient – may exacerbate this misperception. If juries overestimate how much happiness a particular amount of money will bring to a plaintiff, they will underestimate damage awards. Perhaps counterintuitively, the misperception of more hedonic ‘bang for the buck’ means less ‘bucks’ awarded by juries. The net result of the offsetting errors is anything but clear; a jury’s failure to account for adaptation would tend to increase damage awards above their true hedonic value, while a jury’s misunderstanding of the money/well-being connection would tend to decrease them. By placing adaptation in the context of the larger empirical literature on well-being, and comparing recent hedonic valuations of injuries to actual damage awards, this paper challenges the notion that hedonic conceptions of injury necessarily pose a downward threat to damage awards.

DePianto, David Ennio, Health, Happiness and Tort Damages – A Look at the Broader Empirical Picture (January 6, 2012).

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