Non-pecuniary losses

For passenger transportation, there is a high probability that people will be killed or seriously injured if an accident occurs. Victims, and their relatives, can recover pecuniary losses which include medical bills and time away from work. It is also possible to bring suit to obtain compensation for non-pecuniary losses such as pain and suffering, and the loss of the consortium of a spouse or child. However, even if such a suit is successful, it is unlikely that even the most cold-hearted would claim that they can be adequately compensated for their loss. 

In addition, it is commonly accepted in economics that individuals place a higher disutility on risk than would be explained by their pecuniary and non-pecuniary losses. This is known as risk averse behavior. People feel this way because the consequences of a transportation accident are so serious and irrevocable. In contrast, it can be argued that freight shippers may be risk neutral because the losses sustained in an accident are purely financial and will be small compared with the total assets of the corporation. 

Railroads complain that introduction of courts and juries can lead to liability awards that are too great. Generally the issue concerns awards made for non-pecuniary losses, such as pain and suffering, or when punitive damages are awarded in excess of compensatory damages. The latter type of award can only be made when a railroad was found by the court to have engaged in "willful or wanton conduct. Railroads can appeal awards that they feel are excessive to appellate courts. Excessive damage awards should motivate railroads to undertake too much preventive effort. 

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