Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33766
Authors: 
Oswald, Andrew J.
Powdthavee, Nattavudh
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers 2208
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.
Subjects: 
disability
adaptation
happiness
legal compensation
wellbeing
GHQ scores
JEL: 
D1
I3
I31
K0
Document Type: 
Working Paper

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