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http://ssrn.com/abstract=1475364
 
 

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Saving Lives through Punitive Damages


Joni Hersch


Vanderbilt University - Law School; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - College of Arts and Science - Department of Economics

W. Kip Viscusi


Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

August 4, 2009

Southern California Law Review, Vol. 83, No. 2, 2010
Vanderbilt Law and Economics Research Paper No. 09-21

Abstract:     
This article proposes that the value of statistical life be used to set the total damages amount needed for deterrence when punitive damages are warranted in wrongful death cases. The appropriate level of damages should be achieved by adjusting the value of punitive damages. Compensatory damages should not be distorted to establish the total damages level needed for efficient deterrence. Attempts to introduce hedonic damages as a compensatory damages component and proposals to use the value of statistical life on a routine basis when setting compensatory damages awards are misguided and will undermine the insurance and compensation function of compensatory damages. The U.S. Supreme Court’s focus on punitive damages ratios is misplaced, as it is the total damages amount, not the ratio, that is instrumental. The criteria for evaluating punitive damages in bodily injury cases should be different than for property damages cases. The composition of compensatory damages is especially important for bodily injury cases. Empirical analysis of current state court awards in bodily injury cases shows the desired positive relationship between punitive damages awards and the nonpecuniary loss.

Number of Pages in PDF File: 43

Keywords: Punitive damages, value of statistical life, deterrence

JEL Classification: K13, K0, J17

Accepted Paper Series





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Date posted: September 19, 2009  

Suggested Citation

Hersch, Joni and Viscusi, W. Kip, Saving Lives through Punitive Damages (August 4, 2009). Southern California Law Review, Vol. 83, No. 2, 2010; Vanderbilt Law and Economics Research Paper No. 09-21. Available at SSRN: http://ssrn.com/abstract=1475364

Contact Information

Joni Hersch
Vanderbilt University - Law School ( email )
131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7717 (Phone)
615-322-6631 (Fax)
HOME PAGE: http://law.vanderbilt.edu/go/phdlawecon
Vanderbilt University - Owen Graduate School of Management
401 21st Avenue South
Nashville, TN 37203
United States
Vanderbilt University - College of Arts and Science - Department of Economics
Box 1819 Station B
Nashville, TN 37235
United States
W. Kip Viscusi (Contact Author)
Vanderbilt University - Law School ( email )
131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)
HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Vanderbilt University - Department of Economics
Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)
HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm
Vanderbilt University - Owen Graduate School of Management
401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)
HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm
Vanderbilt University - Strategy and Business Economics ( email )
Nashville, TN 37203
United States

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