What Is A Wife Worth? A Comprehensive Overview: Economic Damages

Expert Report

Economic Damages

What Is A Wife Worth?

Comprehensive View

By Stan Smith, PhD

The full value of what a wife is worth is indeed a provocative and difficult question, and one that often arises in Nevada courts. Many women are effectively the chief executive officer of a complex organization known as a household, in addition to whatever work they may perform at an outside job. When a woman is injured or killed, in addition to lost income, the household loses a large variety of irreplaceable household family management services, not just the execution of physical chores.

Juries are asked to place a value on these services in personal injury and wrongful death claims…but how can they possibly do that? Further, what guidance can an economist give them?

Evaluating Physical vs. Nonphysical Chores

While most think of household services in terms of physical chores such as housecleaning, cooking, laundry, etc., what makes the wife’s CEO job complex is that women also provide tangible advice, counsel and accompaniment services akin to that provided by coaches, advisors, home aides, or companions to the elderly. Economists have traditionally only valued the physical chores and have ignored the non-physical duties and responsibilities, yet these, too, can be valued based on comparable market alternatives (obviously, exclusive of love and affection).

For an injured woman in her 30s (including those fatally injured) who can no longer provide such services, the loss of housekeeping alone typically exceeds $1 million; however, the loss of advice and accompaniment typically exceeds that amount to the husband alone. Advice and accompaniment is also lost to children, siblings, parents, etc., thus this value can quickly multiply and eclipse the loss of the value of physical chores as well as income. For full and fair recovery to claimants, these additional components of household services must also be valued.

The methods I and other economists use to value the loss of the intangible love and affection component of society and companionship, or consortium, was discussed in my the last article for Vegas Legal Magazine (VLM). (The loss of quality or enjoyment of life to the injured person is another separate component, to be discussed in a forthcoming article.) Courts have long recognized claims for the value of tangible household family services as an element of damages in personal injury and wrongful death cases. However, women are not the only ones to provide such services: so do men, and to some degree, children, as well. These services are provided without charge or cost. The family members who may receive such services can include spouses, children, parents, or siblings. (Such family members do not necessarily have to reside in the same household to receive such services.)

Economists and courts have also long recognized that an appropriate method in valuing such tangible services is to look at market equivalents from which an economic standard can be established. This approach was set forth in the 1913 U.S. Supreme Court Decision, Michigan Central Railroad Company v. Vreeland, 227 U.S. 59 (1913). The Supreme Court’s suggesting in valuing compensable services in Vreeland is a standard that is not rigid, but actually rather general: “[The] pecuniary loss or damage must be one which can be measured by some standard….Compensation for such loss manifestly does not include damages by way of recompense for grief or wounded feelings.”

Examples of lost household services that used to be performed by persons (whether fatally or non-fatally injured) include physical chores such as mowing the lawn, painting the house, cleaning the windows, doing the laundry, washing and repairing the car, preparing the meals and doing the dishes, among others. But since economists recognize that in addition to the physical chores, “tangible services” to family members include services well beyond the physical housekeeping chores, it is important that a complete analysis of all services performed by family members include much more than the physical housekeeping chores. This supported by my own research and that of others that is published in peer-reviewed, scientific, economic journal articles that I, and others, have authored.

The Human Factor

Every family member acts as a companion to other family members. And it is common for family members to act as counselors for one another. Women typically provide advice and counsel on important personal, family, medical, financial, career or other issues. The marketplace can and does value such items of loss. If the person cannot provide these services, or does so at a reduced capacity or rate, there is a distinct and definite loss to the other family members. These losses have a definite and easily measurable pecuniary value. Vreeland requires only that a “reasonable expectation” of loss of services be proven, and that such loss be valued by some standard—presumably a reasonably based economic standard—to allow recovery.

The economic literature on recovery of loss of services discusses an estimated, market-oriented valuation cost method to assess the pecuniary value advice, guidance and counsel services, as well as the loss of accompaniment services that family members provide to one another, within a broadly defined scope of household family management services.

According to Chief Justice Robert Wilentz of the Supreme Court of New Jersey, in Green v. Bittner, 85 NJ 1, 1980, pp. 12, accompaniment services, to be compensable, must be that which would have provided services substantially equivalent to those provided by the home companions often hired today by the aged or infirm, or substantially equivalent to services provided by home health aides; and their value must be confined to what the marketplace would pay a stranger with similar qualifications to spend social time with another for performing such services.

Both the U.S. and the New Jersey Supreme Courts discuss looking at labor markets for the equivalent value of such services…an identical methodology to the traditional approach that economists have been using for over four decades that uses market rates paid to housekeepers; child care providers; waitstaff; private household cooks; laundry and dry cleaning workers; maids and housekeepers, etc., which averages approximately $20 an hour. The number of hours expended can depend on family size. While standard tables provide such hours, and interviews with family members can also establish estimates, at three hours a day (a typical measure), the value exceeds $20,000 per year, which for a young wife can exceed $1 million over a lifetime.

The Emotional Factor

The value of advice and counsel services is also measured using market rates paid to people who work as family counselors, social workers, clergy, coaches, teachers, etc., which averages approximately $35 an hour. Again, the number of hours expended can depend on family size, but at one hour per day for the husband (a typical measure), the value exceeds $12,000 per year, which for a young wife can exceed $500,000. Children, siblings and parents who receive such services often lose in aggregate an amount equal to or exceeding this figure.

The value of accompaniment, or social time spent with family members, is again measured using market rates paid to home companions which averages approximately $15 an hour. On average, at three hours per day for the husband, the value exceeds $15,000 per year, which for a young wife can also exceed $500,000.

When added together, the injury to a wife can result in household family management services that can be a multiple of the traditional housekeeping chores alone. (And, naturally, the same approach outlined above can be used when measuring the loss of husbands.) Regardless of which parent is no longer a part of the family, when such testimony is provided to a jury through family members and an economist, a full and fair recovery can be achieved.

Stan V. Smith, Ph. D., is president of Smith Economics Group, Ltd. Trained at the University of Chicago (one of the world’s pre-eminent institutions for the study of economics and the home of the law and economics movement), Smith has also taught at the university and co-authored the first textbook on the topic of economic damages. A nationally renowned expert in economics who has testified nationwide in personal injury, wrongful death and commercial damages cases, Smith has assisted thousands of law firms in successful results for both plaintiffs and defendants, including the U.S. Department of Justice. To that end, Smith also developed the first course in forensic economics at DePaul University, and pioneered the concept of “hedonic damages,” testifying about the topic it in landmark cases. His work has been featured in the ABA Journal, National Law Journal, and on the front page of The Wall Street Journal.