Saving Lives through Punitive Damages
Vanderbilt University - Law School; Institute for the Study of Labor (IZA); 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
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
Date posted: September 19, 2009
© 2015 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo3 in 0.328 seconds