TEA.1.1

Description

The 1988 decision in Sherrod v. Berry introduced the term “hedonic damages” into the lexicon of the American legal system. Nine years later, the term “hedonic damages” has become synonymous with damages awarded in tort actions for the “lost enjoyment of life.” Since the Wall Street Journal (Barrett, 1988) made the term “hedonic damages” well known on December 12, 1988, two significant confusions have arisen concerning the meaning of hedonic damage testimony and how it was to be presented in a court of law. That confusion, however, is much less important than the fact that economists have provided three distinct types of testimony derived from the “value of life” literature in economics. These three types of testimony have quite different implications, but have been treated by the court system and by many forensic economists as being identical. It is the purpose of this paper to explain the differences between these three types of testimony, and to describe some of the variations in methods used by practicing forensic economists within each of the basic types, particularly the type that involves generation of estimated annual values for lost enjoyment of tort victims.