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Editors' Note

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As the state paper series in the Journal of Forensic Economics has become an established feature, we are pleased that this issue of the JFE is the first to feature updates to previously published state papers. We know that both statutes and case law governing damages and the role of expert witnesses in the courts are evolving. Hence, the need for updates to state papers published prior to such changes.

In this issue, Tyler Bowles has updated state papers that he co-authored concerning Idaho and Utah, Blakely Fox Fender has provided information concerning Mississippi since his

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ARTICLES

Retiring the Historical Net Discount Rate

DOI: 10.5085/372.1

Abstract

The methodology of using a net discount rate (“NDR”) to calculate the present value of future labor earnings is now over 50 years old. First found in public health economics, the earnings NDR later reached forensic economics where it was adapted to other calculations such as the present value of medical costs. At first, some forensic economists embraced the historically determined wage NDR arguing that it was simple, fair, and 0% since annual wage growth and interest rates had been fairly equal to that time. The 0% wage NDR did not sit well with some other forensic economists, and so a discourse began in the literature regarding its numeric value. Largely missing from the debate has been an analysis of the historically determined NDR, as it has been constructed and used, as a legitimate present value methodology. Building upon the initial criticisms of the NDR by Jones (1985, 1986) and the recent work of Foster (2015), this article examines the historical wage NDR method and concludes that, for several reasons, it is theoretically faulty, empirically inconsistent, and not relevant to forensic economics.

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An Alternative Estimation Technique for Determining Discount Rates and Earnings Growth Rates in Wrongful Death and Personal Injury Cases

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DOI: 10.5085/JFE-397.1

Abstract

Regardless of the time period studied since the 1970s ended, without adjustments for structural factors, both real and nominal interest rates across the spectrum of maturities exhibit non-stationary processes with a unit root. Consequently, simply employing past means of either real or nominal yields losses a degree of credibility. Focusing on the period of the “Great Moderation,” employing structural break analysis can remove the non-stationarity so that forensic economists can chose not to use more complex ARIMA models, stochastic properties of interest rates, or estimating methods more complex than these. Rather, following the analysis in this paper, forensic economists can employ one of a small number of discount rates from a not too distant past time period that reflect systematic variations more likely to be consistent with predictable future interest rates.

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SPECIAL SECTION

Assessing Economic Damages in Personal Injury and Wrongful Death Litigation: The State of Nebraska

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DOI: 10.5085/JFE-406.1

Abstract

This article presents a framework for computing damages in Nebraska personal injury and wrongful death cases. The analysis is based on statute, common law, case law, jury instructions and practice. Elements unique to personal injury and wrongful death cases are discussed, as well as elements common to both. The role and requirements for damage experts are examined, as are the work product and likelihood of deposition and testimony.

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Assessing Economic Damages in Personal Injury and Wrongful Death Litigation: The State of Rhode Island

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DOI: 10.5085/JFE-408.1

Abstract

This article presents the legal framework for the assessment of economic damages in the state of Rhode Island. Special attention is given to the statutes and case law that govern the estimation of damages in personal injury and wrongful death actions, including medical malpractice. An overview of the role of the damages expert is included.

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Update to Assessing Economic Damages in Personal Injury and

Wrongful Death Litigation: The State of Idaho

DOI: 10.5085/JFE-414.1

Abstract

This paper covers the current changes in personal injury and wrongful death litigation in the state of Idaho.

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Update to Assessing Economic Damages in Personal Injury and

Wrongful Death Litigation: The State of Utah

DOI: 10.5085/JFE-413.1

Abstract

Current changes to personal injury and wrongful death litigation in the state of Utah.

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Update to Assessing Economic Damages in Personal Injury and Wrongful Death Litigation: The State of Mississippi

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DOI: 10.5085/JFE-416.1

Abstract

This article provides summary and analysis of case law and relevant statutes in Mississippi since 2004 that are important for the forensic economist to consider in the calculation of economic damages in wrongful death and personal injury matters. Particular attention is devoted to Rebelwood Apartments RP, LP v. English (2010), which provided specific guidance to the forensic economist in Mississippi on several fronts and explicitly tasks the economic expert with rooting analysis in sufficient facts and evidence.

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Update to Assessing Economic Damages in Personal Injury and

Wrongful Death Litigation in Florida

DOI: 10.5085/415.1

Abstract

Current changes in personal injury and wrongful death litigation in the state of Florida.

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BOOK REVIEW

How Our Days Became Numbered

DOI: 10.5085/JFE-420.1

This is a carefully researched book by historian Dan Bouk, who examines how America came to terms with becoming simply numbers in a ledger. This change, however, took place voluntarily as a result of people attempting to reduce the risks of life through the purchase of insurance. The story begins after the Panic of 1873 and stretches through the Great Depression, although there is a concluding chapter briefly covering current issues. This review will provide a summary of the book, with greater emphasis on those chapters most relevant to forensic economists. However, it will be helpful to first briefly review

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Taxes and Value: The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle

DOI: 10.5085/JFE-418.1

This book is organized into eight short chapters with seven appendices. The book offers a novel approach to the valuation of pass-through entities by adjusting cost of capital measures rather than cash flows. The authors are critical of existing cash-flow-based models used to value pass-through entities as being speculative and proffer a novel approach. Much of the book is a review of published research which demonstrates that shareholder-level taxes are embedded in the rates of return of public companies. The authors state that the practice of applying cost-of-capital measures, derived from public company data, to the cash flows of privately

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NAFE MEMBERS DIRECTORY

NAFE Members Directory

DOI: 10.5085/0898-5510-26.2.259

The associates listed here have become NAFE members since the last issue of the JFE.

Scott Angelius

215 E. Oklahoma Ave.

Knoxville, TN 37917

scott@damageguide.com

(512)797-9509

RoseMary Avery

Cornell University

Dept. of Policy Analysis & Mgt.

2301 G MVR Hall

Ithaca, NY 14850-2824

rja7@cornell.edu

(607) 255-2578

Peter Desmond Bates

Bates Forensic Valuation Ltd.

PO Box 35246

Browns Bay

Auckland 0753

New Zealand

info@bates.net.nz

64(9)4820209

Gregory Billings

100 Fort Dr., NE, Apt. 5

Washington, DC 20011

billings.g@gmail.com

(202)440-7714

Ike D. Braden

35 Windward Loop

Kalispell, MT 59901

bradenav8r@msn.com

(406)890-9390

Blake James Briles

575 S. Freedom Blvd., #207

Provo, UT

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Editors' Note

Retiring the Historical Net Discount Rate

Abstract

An Alternative Estimation Technique for Determining Discount Rates and Earnings Growth Rates in Wrongful Death and Personal Injury Cases

Abstract

Assessing Economic Damages in Personal Injury and Wrongful Death Litigation: The State of Nebraska

Abstract

Assessing Economic Damages in Personal Injury and Wrongful Death Litigation: The State of Rhode Island

Abstract

Update to Assessing Economic Damages in Personal Injury and

Wrongful Death Litigation: The State of Idaho

Abstract

Update to Assessing Economic Damages in Personal Injury and

Wrongful Death Litigation: The State of Utah

Abstract

Update to Assessing Economic Damages in Personal Injury and Wrongful Death Litigation: The State of Mississippi

Abstract

Update to Assessing Economic Damages in Personal Injury and

Wrongful Death Litigation in Florida

Abstract

How Our Days Became Numbered

Taxes and Value: The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle

NAFE Members Directory

Mothers’ Worklives and Marital Status

Personal Consumption and Single Persons: An Update

A Closer Look at Race, Ethnicity, and Gender Neutral Models

Life-Cycle Estimates of Earnings Growth by Education and Gender

Assessing Economic Damages in Personal Injury and Wrongful Death Litigation: The State of Montana