A model to project loss of earnings from impaired or destroyed capacity

Conclusions Attempts have been made for many years to place a monetary value on human life. Rather than becoming easier over time, determination of a value has become more difficult, especially within the past 25 years. Accuracy of estimates is reduced because of uncertainties associated with changing economic and social conditions. For example, the importance of the variables used in this analysis has intensified within recent years because of the changing nature of the American economy, coupled with expanding social programs. Particularly important among the variables affecting earnings are occupational alternatives, education, age, productivity, inflation, and interest rates. Despite the restraints noted above, a methodology exists for conceptualizing these factors into a systematic economic approach for estimating and projecting individual earnings. This article has utilized a methodology to relate economic concepts to the problem of establishing a monetary value of lost earnings due to impaired capacity or death. It essentially involved determination of the difference in expected lifetime earnings prior to and after the occurrence of impairment or death and discounting this difference to a present value. The authors wish to express their appreciation to Professor R. Kenneth Manning, Jr., of the Cumberland School of Law of Samford University for his helpful comments and suggestions.