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Keywords:

  • individual costs of domestic violence;
  • compensating variation;
  • life satisfaction approach
  • D1;
  • I3;
  • J12;
  • O15

Abstract

This paper discusses and estimates the costs of domestic violence using a life satisfaction approach. It draws on a British cross-sectional data set that includes individual self-reported life satisfaction, household income and experienced domestic violence. The paper estimates the costs of domestic violence as the compensating variation of domestic violence resulting from estimating a life satisfaction regression equation. Some attempts to deal with the problem of self-selection into abusive relationships and to account for the endogeneity of household income are discussed and implemented. The results suggest that domestic violence is costed very highly by its victims, with estimates ranging from £27,000 to over £70,000. Hence this paper contributes to the literature on valuing non-marketable goods and discusses the usefulness of a life satisfaction approach when estimating the costs of domestic violence. It claims that, despite its shortcomings, a life satisfaction approach allows for a valuation of domestic violence and answers questions often not answered by other valuation methods.