Damage estimation in mass torts involving hazardous or defective products is often complicated by the unknown time-profile of disease incidence or failure rate. Because these cases involve diseases with long latencies or involve products that fail after years of productive use, estimation of the defendants’ future liability stream requires a model that can predict how the failure rate or the onset of the disease will change over time. This paper proposes such a model. The estimation technique allows one to compute the ‘excess risk’ attributable to the hazard or product defect distinct from the natural causes of failure or disease incidence and to calculate the defendants’ future liability stream based on the estimates of failure or incidence rates. An application to product failure illustrates the working of the model.

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“A New Approach to Estimating Damages in Mass Torts,” A. Saha, L. Hilton, International Journal of the Economics of Business, 7(1) (2000), 27-46