If the reader would like assistance obtaining an article discussed herein, please contact Dr. Boisso at 214-394-3165 or Dale@BoissoAndAssociates.com.

January 19, 2013
Back Pay and Front Pay May Not Be the Only Economic Damages in Employment and Discrimination Lawsuits

In matters of wrongful employment termination and employment discrimination lawsuits, economic losses are generally determined as lost back pay and lost front pay, inclusive of the value of relevant employee benefits.  However, it is possible that the employee’s earning capacity may have been harmed as a result of the alleged illegal action by the employer.  As a consequence, the plaintiff’s losses could include lost earning capacity in addition to lost back and front pay.

January 11, 2013
The Risk and Reward of Investing a Lost Earnings Award

The discount rate used to compute the present value of lost earnings in a personal injury, wrongful death, or wrongful employment termination lawsuit is a critical factor that can significantly impact the “bottom line” value presented to a jury as an award value.  A recent journal article examines that impact using several different discount rates and investment rates of return, evaluating the risk and reward of each scenario, including analysis of the chance of the investment portfolio "failing" to provide the replacement stream of monies.

December 31, 2012
Using Monte Carlo Sensitivity Analysis to Estimate Lost Earning Capacity

I recently estimated the lost earning capacity of a surgeon by using Monte Carlo sensitivity analysis to satisfy the criterion of “within a reasonable degree of economic probability.”  This method was necessary because the surgeon’s earnings were based on numerous factors, all of which were variable, that is, predictable only within a range of possible values.  However, the variable factors were capable of being defined by a probability distribution.

October 22, 2012
Some Damages Experts Incorrectly Compute Real Discount Rates

In calculating economic losses that occur after some date, for instance, lost wages after the date of trial, it is necessary to compute the present value of all such future values.  In some courts, a below-market interest rate is used to compute said present values.  A below-market discount rate is generally derived as the nominal interest yield on an investment instrument adjusted for anticipated inflation.  (A nominal interest rate refers to the rate of interest prior to taking inflation into account.  A real interest rate refers to the rate of interest after removing the effects of inflation.)  

Tags: Discount Rates, Economic Losses
October 15, 2012
Understanding the Meaning of Remaining Work-Life Expectancy

On more than one occasion I have been asked to explain the concept of remaining work-life expectancy to an attorney during a deposition.  It is clear from their questions that the concept is often mistakenly believed to represent a projection to the date the worker will retire from the work force.  This is not the case. 

Tags: Work-Life Expectancy
October 8, 2012
The Updated Tables Of Number of Years Of Remaining Work-Life

The most recent update of work-life expectancy tables was published in the August 2011 volume of the Journal of Legal Economics.  The current tables include information concerning “extended probability calculations and statistical measures” of time in the labor force.  

Tags: Work-Life Years, Labor Valuation
October 1, 2012
Estimating the Duration of Economic Losses in Wrongful Termination Cases

A recent article in the Journal of Legal Economics summarizes the many studies that have been done over the years which address the issue of how to measure the duration and magnitude of earnings lost when a worker loses his/her job.  

September 24, 2012
Have Obamacare and the I.R.S. Helped Solve a Problem for Forensic Economists?

The Patient Protection and Affordable Care Act of 2010 (more commonly known as ObamaCare) requires employers to report the aggregate cost of their employer-sponsored group health plan coverage on their employees’ W-2 form.  The purpose of adding this information is to educate consumers of healthcare on the value of medical benefits provided by employers, and forensic economists are taking note of this new, possible source of what is sometimes hard-to-get information on such employee (fringe) benefits

Tags: IRS, ObamaCare, W-2
September 17, 2012
Should the Value of a Statistical Life Be Part of a Wrongful Death Damages Award?

An attorney recently brought to my attention an article in The New York Times that discussed a concept known as the value of a statistical life (“VSL”).  The article cited sources placing this value in the range of $5 to $9 million.  The attorney was interested in knowing whether the notion of VSL could be used in wrongful death lawsuits as an element of compensation to the survivors of the decedent.  Given that courts must make dollar decisions on various components of compensation in death cases, it is reasonable to wonder whether VSL affords a more “scientific” basis for such assessments.  I wrote a mini-white paper explaining VSL, the various methods by which it has been computed, and opining on the appropriateness of introducing VSL into the courtroom.  You can read that white paper here.

By Dr. Dale Boisso
Tags: Wrongful Death, Damages Valuation
September 10, 2012
Assessing Economic Damages in Personal Injury and Wrongful Death Litigation - The State of Texas

An article published in the Journal of Forensic Economics describes the basic law and practice of determining economic damages in courts in the State of Texas.  Although the article was written primarily for forensic economists it can serve as a good primer to attorneys or anyone seeking a foundational understanding of the Texas Rules of Evidence, relevant case law concerning scientific and technical evidence, as well as common practices applied by economists in computation of economic damages in personal injury and wrongful death cases.

By Dr. Dale Boisso
Tags: Forensic Economics, Economic Damages in Texas, Texas Rules of Evidence, Personal Injury, Wrongful Death, Litigation
September 3, 2012
New Insights Into Values Placed on Household Services

A recent study investigates intra-household allocations of time spent doing laundry, ironing, cleaning, and food shopping by heterosexual couple households.  The analysis considers the impact of each spouse’s earnings on such decisions, as it is hypothesized that wage differences between genders influence differences in time devoted to household responsibilities.  But the study adds an interesting and insightful twist to the analysis by examining each individual’s preferences towards performing such household chores, that is, the degree to which the individual likes to do these tasks.  (Other possible explanatory factors are also evaluated, including, importantly, the cost of maid services.) 

One interesting result reveals that an increase (decrease) in the woman’s wages is associated with a decrease (increase) in her time spent performing household chores and an increase (decrease) in her spouse’s time spent.  However, a similar result cannot be concluded for a change in the man’s wages (that is, it is not statistically significant).

Explaining Changes in Wages and Income Inequality, 1979 to 2009

In the wake of the Great Recession and the Occupy Wall Street protests, and following the recent English-version publication of Thomas Piketty’s Capital in the Twenty-First Century, income inequality has been the subject of much public discussion in the United States. In 2011, the Congressional Budget Office produced a report for the Senate Committee on Finance entitled “Changes in the Distribution of Workers’ Hourly Wages Between 1979 and 2009”. In this study, the CBO tracks wage levels and wage distribution, and offers some explanations for changes observed over time.

Tags: Economic Losses, Personal Injury