By: Karis Kelly
Economics is connected to a variety of careers, ranging from law to medicine. One of many subsets within law and economics is forensic economics. Forensic economics is defined as “the scientific discipline that applies economic theories and methods to matters within a legal framework” (National Association of Forensic Economics, accessed 2021). One of the major themes this economic and scientific discipline applies to is loss of enjoyment of life and commercial damages. The concept is known as hedonic damages. One key component of forensic economics is its application during a lawsuit. For instance, during a lawsuit, the idea of intangible losses (hedonic damages) and how it impacts a person’s life can be applied.
Stan Smith of Smith Economics Group discussed the importance of Hedonic Damages. When he discovered this theory, it changed the game for forensic economics. It allowed for the quantification of losses without over-complicated the application. There is constant evolution within forensic economics as technology, economics, and science advance. Within the past five years, 50 journals have been published in the Journal for Forensic Economics. Research can range from assessments of damages in litigation to unemployment and work-life. (Journal of Forensic Economics, accessed 2021). New theories and ideas are changing the field and increasing its size. Not only are new ideas a factor, but the accessibility of data is another factor. An anonymous forensic accountant stated, “The increase and accessibility of data has dramatically altered the way many engagements are handled today relative to five years ago – let alone when I first began my career in forensic accounting.”The digitization of the field has created an interdisciplinary effect. Massive database software can even require Python knowledge, combining both computer science and law
All in all, the field of forensic economics in a small community is constantly evolving to help its clients. Innovative theorems and technology continue to impact its continuity as a subset of economics. Forensic economics continues to emerge in litigation and grows more and more members. Interested in the field of forensic economics? Check out the National Association of Forensic Economics for a sneak peek inside the detailed work forensic economics do.