New Economics Papers
on Law and Economics
Issue of 2006‒07‒21
one paper chosen by
Jeong-Joon Lee, Towson University


  1. Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges By Andrew J. Oswald; Nattavudh Powdthavee

  1. By: Andrew J. Oswald (University of Warwick and IZA Bonn); Nattavudh Powdthavee (University of London)
    Abstract: Economics ignores the possibility of hedonic adaptation (the idea that people bounce back from utility shocks). This paper argues that economists are wrong to do so. It provides longitudinal evidence that individuals who become disabled go on to exhibit recovery in mental wellbeing. Adaptation to severe disability, however, is shown to be incomplete. The paper suggests ways to calculate the level of compensatory damages for the pain and suffering from disablement. Courts all over the world currently use ad hoc methods.
    Keywords: disability, adaptation, happiness, legal compensation, wellbeing, GHQ scores
    JEL: D1 I3 I31 K0
    Date: 2006–07
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp2208&r=law

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