Deriving Reasonable Range Estimates in Life Care Plan Analysis and Other Forensic Economic Applications
Document Type
Working Paper
Date of This Version
12-1-2003
Keywords
forensic economics, life care plan
Abstract
When an aggregate range of costs is estimated merely by summing the individual cost category ranges, the result is a reported aggregate range that is unnecessarily broad and thus misleading. The likelihood of occurrence of the extreme values in the range formed by mere arithmetic aggregation is so low that forensic economists would do better to omit such values by truncating their reported aggregate ranges. In searching for a suitable method of truncation, a few intuitively appealing methods are discarded once shown to be either impractical or intractable. Ultimately, a proposed procedure emerges that is methodologically sound and easily applied. The recommended method of truncation yields realistic and defensible aggregate range estimates that are capable of correct interpretation by forensic economists, attorneys, judges and jurors.
Working Paper Number
0303
Recommended Citation
Schap, David, "Deriving Reasonable Range Estimates in Life Care Plan Analysis and Other Forensic Economic Applications" (2003). Economics Department Working Papers. Paper 107.
https://crossworks.holycross.edu/econ_working_papers/107
Published Version
This article was published as: Schap, D. (2004). Deriving Reasonable Range Estimates in Life Care Plan Analysis and Other Forensic Economic Applications. Journal of Forensic Economics, 17(1), pp. 39-45.