Our Happiness Baseline

             It appears humans have a thermostat that brings them back to a Quality of Life status quo, even if they win the lottery or have an automobile accident. Technically, this is called the “hedonic treadmill”. It has the most impact in tort cases where the plaintiff has limb deficiencies, spinal cord injuries, and burns; or where they require colostomies or dialysis.  The effect is least evident in cases of chronic noise, dull pain, and headaches; in cases of unemployment, divorce and separation, and with progressive conditions like rheumatoid arthritis and multiple sclerosis. These two classes of personal injury are called “adaptable” and non-adaptable; because the former group adapts, returning to a point close to their pre-injury happiness baseline; and those in the latter group do not.

             Professor Jonathan Masur at the University of Chicago Law School proposes three “hedonic adaptation” consequences for tort  litigation in Federal courts:[1]

1.         The longer plaintiffs with “adaptable” injuries wait for trial, the more they will reduce their settlement demands;

2.         Cases involving adaptable injuries will settle more than cases with non-adaptable injuries; and

3.         The number of settlements in hedonic adaptation cases will increase in direct proportion to the length of litigation time before trial.


            These conclusions are consistent with my observation of other normalizing processes in the human body, so I think they are probably accurate.  Other examples of recovery from a major disruption include:

(a)       Extra sleep after sleep deprivation, followed by resumption of the prior sleep pattern;

(b)       The gradual return to former obesity after weight reduction on a “crash” diet; and

(c)        The ability of children to rebound from psychological trauma.

             Furthermore, as litigators are well-aware, many factors influence settlements besides wealth maximization; including optimism bias, prospect theory and fairness.  Hedonic adaptation certainly appears to be one. 

[1]  Bronsteen, John , Buccafusco, Christopher J. and Masur, Jonathan S., “Hedonic Adaptation and the Settlement of Civil Lawsuits,” . Columbia Law Review, Forthcoming Available at SSRN: http://ssrn.com/abstract=1098271