The Journal of Forensic Economics has reached a significant milestone with publication of this issue. This is the first issue of Volume 25 of the JFE. After publishing 66 issues and 605 papers, the JFE has come a long way from its initial concept as first presented in an April 1987 NAFE Newsletter. Volume 1, Issue 1 was published in September 1987. The founding editors were John Ward as Managing Editor, Gerald Olson as co-Editor, and the initial board of editors included William Cobb, LeRoy Grossman, Paul Junk, B. F. Kiker, Don
The Editors of the Journal of Forensic Economics are honored to announce that the 2014 recipients of the Ward–Piette Research Prize in Forensic Economics are Stephen M. Horner and Frank Slesnick for their 1999 paper titled “The Valuation of Earning Capacity Definition, Measurement and Evidence,” JFE 12(1):13–32. This is the inaugural year for the Ward–Piette Research Prize in Forensic Economics. The Prize was established by the Journal of Forensic Economics in order to recognize JFE published research that has had a lasting impact on the forensic economics literature. The prize will be
This issue of the Journal of Forensic Economics (JFE) begins the 25th volume of that publication. As the first Editor of the JFE and the co-author of the first paper published in that journal, “Forensic Economics: A Perspective and an Agenda for Research” I have been asked to offer comments on the role that the JFE has had in the development of the field of Forensic Economics over the past 25 years. This paper examines the evolution of the journal in terms of the focus of papers published by field of investigation and presents the results of a survey of subscribers on their views on the quality of the JFE, its strengths and its shortcomings. Finally, a new agenda for the JFE is offered that will discuss the primary problems the journal will likely face in the next 25 years and the areas of research to be addressed.Abstract
Wage growth forecasting is a necessary part of forensic economics. In this paper, we present a time series methodology to test whether wage and compensation growth in the United States varies by industry and occupation. If growth varies, then the common use of “all-worker” net discount or wage growth rates would not be accurate for every forensic economic case. Using the Employment Cost Index, we find that total compensation, wage, and benefit growth in some, but not all, industries and occupations has been significantly different from that of the wage growth of all workers. That finding may concern the forensic economist who needs to construct a variety of net discount or wage growth rates. As an alternative to constructing multiple forecasts, this paper provides estimated industry and occupational specific differentials from the growth in all workers' wages.Abstract
A panel of age-specific transition probabilities is developed for the three-decade period 1980 to 2010. Analysis shows that both male and female transition probabilities have evolved over the 30-year span. The transition probabilities are used to calculate both period and cohort worklives. The results differ starkly for men and women. For men, worklives are most affected for those with little education. For women, obtaining a college degree has the most impact on worklives. The results suggest that using historical period worklives may have mis-estimated worklives for these two groups relative to cohort estimates.Abstract
This paper appends the standard Markov increment-decrement worklife expectancy model used in forensic economics to measure the years that people perform the non-market work of taking care of their homes or families. We find that adding non-market working years to the worklife model nearly equalizes men and women's estimated lifetime total working years. The paper begins with the gender-related problems of solely using labor force worklife tables as a tort compensation determinant. We then present demographic characteristics of persons that perform full-time, non-market work. A Markov life table model that incorporates two work activities (market and non-market work) is specified—we name the sum of market and non-market working years “total worklife expectancy.” Ending the paper are examples of using total worklife expectancy as a tort compensation estimator.Abstract
The practice of forensic economics has a long history of trying to identify the correct interest rate to use when valuing economic losses in personal injury and wrongful death cases. We trace the legal history as it relates to the appropriate interest rates and adjustments for inflation. We then discuss the use of Treasury Inflation Protected Securities, TIPS, and an analysis of the combined effect of realized inflation and taxes on the effective return. We come to the unexpected conclusion that the use of TIPS does not lend itself to a simple adjustment to the rate for taxes nor eliminate the need to consider expected inflation.Abstract
A Comment on George DeMartino's “Professional Economic Ethics: The Posnerian and Naïve Perspectives”
The DeMartino (2013) paper provides a provocative and informative review of the key aspects of the ethical problems faced by applied economists. The purpose of this Comment is not to challenge the contrasts drawn by the author between the two ethics perspectives. Rather, it is our intent to examine more closely the ethical issues that forensic economists may potentially encounter, as identified by the author. DeMartino's paper is rather ambiguous with respect to forensic economic ethics. On the one hand, the paper states that the pressures upon forensic economists are more powerful than those faced by other applied economists; yet, the paper identifies some reasons explaining why there are mechanisms that reduce such pressures.This Comment argues that the author has already identified the broad parameters that explain why ethical problems are less severe for practicing forensic economists. This Comment also expands upon the reasons for this more favorable situation. As a result, the author's conclusion that economics “today is a rogue profession” is excessively broad for two reasons: (1) the focus of the paper is on applied economics, not the entire economics profession, and (2) the phrase would more accurately be stated as: some but not all applied economics comprise a rogue profession.Abstract