193007 Economic Value of Moral Damage Related to Workers' Compensation

Sunday, November 8, 2009

Josť Luis Navarro Espigares, PhD, Prof, Mgr , Economic Department, University Hospital Virgen de las Nieves, Granada, Spain
Josť Aureliano Martin Segura, PhD, Prof , Department of Management, Granada University, Ceuta, Spain
On the international level, compensation systems for accidents traditionally presented great heterogeneity. Legal compensation scales are being used to reduce arbitrariness and variability in the calculation of payments for personal injuries. However, this tool has not yet achieved international convergence for amounts of compensation.

Compensation systems for accidents are usually based on four components: bodily injury, moral damage, property damage, and lost income. In this paper we propose a new method for calculating the economic value of moral damage, utilizing analytical tools usually applied in health technologies assessments. Specifically, the estimate is derived from the value of a statistical life, the Quality Adjusted Life Years (QALYs) lost by workers, and their particular circumstances. The economic value of moral damage is the difference between the value of a QALY and the worker's average wage level.

The results of applying this method in Spain indicate that on average people's willingness to pay per QALY far exceeds their annual salary. This over-valuation of QALY can be attributed to the subjective value of life unrelated to one's individual income. In particular, the moral damage is equivalent to 33.49% of the monetary value of a QALY.

The proposed method offers many advantages, both legal and methodological, with respect to existing procedures in Europe. It also addresses the concerns of some Spanish political and academic institutions, such as the Economic and Social Council, in which entrepreneurs, citizens, and unions are represented, and the National Institute on Occupational Medicine.

Learning Objectives:
To describe an innovative method to calculate economic value of moral damage in work accidents. To calculate moral damage value for work accidents

Keywords: Workers' Compensation, Occupational Injury and Death

Presenting author's disclosure statement:

Qualified on the content I am responsible for because: I have several publications regarding the economic value of moral damage in relation to work accidents. Methodology presented in this work has been recently published in a book edited by the Spanish Economic and Social Council.
Any relevant financial relationships? No

I agree to comply with the American Public Health Association Conflict of Interest and Commercial Support Guidelines, and to disclose to the participants any off-label or experimental uses of a commercial product or service discussed in my presentation.