A wrongful death claim compensates the survivors for the support they lost, not for everything the decedent would have earned, and part of every earner's income goes to the earner's own needs. The personal consumption deduction is the share of income the decedent would have spent on food, clothing, transportation, and the other costs of one person, removed from the projected earnings so that what remains is the support the household actually lost. This guide explains where the percentage comes from, what it is applied to, how it changes over the projection, and where opposing reports go wrong with it.
A living earner spends part of every paycheck on himself or herself: the food eaten alone, the clothing worn, the share of the car and the phone and the insurance that served one person, the meals out and the hobbies. When that person dies, the survivors lose the income the decedent would have brought home, but they also stop bearing the cost of the decedent's own consumption, and a claim that ignored the second fact would compensate the household for money it never would have kept. The wrongful death economic loss analysis therefore measures support: the projected earnings less the share the decedent would have consumed personally.
The deduction is a feature of the survivors' claim, not of every death case. Where the governing framework measures the decedent's own lost earnings, as a survival action does for the period between injury and death, or measures the loss to the estate rather than to dependents, the deduction may not apply or may apply differently, and the wrongful death guide describes how the two frameworks divide the components. Counsel confirms which measure governs; the economist builds the figure to that measure.
The percentage is not a guess and not a flat rule of thumb. Forensic economists read it from published personal consumption tables built on the household expenditure data the Bureau of Labor Statistics collects, which record how households of different sizes and income levels divide their spending among members. The tables report, for a household of a given size and income, the share of income a member would have consumed personally, and they distinguish the decedent's role, since an adult earner and a dependent child consume differently. The personal consumption method page describes the tables and the steps in detail.
Two patterns in the data explain most of what the tables say. The share falls as the household grows, because the same income supports more people and each member's personal slice is smaller. The share also falls as income rises, because a larger part of a high income is saved, spent on the home, or spent on the family as a whole rather than on one member's needs. A single earner with no dependents sits at the high end of the range; an earner in a large household with a modest income sits at the low end. The report names the table, the edition, and the row it read so the percentage can be checked.
The tables express consumption as a share of a defined income, and the report has to apply the percentage to the same definition. Some tables state consumption as a share of the decedent's own earnings; others state it as a share of the household's combined income, which matters when a surviving spouse also earned. Applying a household-basis percentage to the decedent's earnings alone, or the reverse, is the single most common error in the deduction, and it can move the figure by a wide margin in either direction. The report says which basis the table uses and shows the conversion where one is needed.
The deduction runs against earnings and the benefits that arrive as cash or as cash-equivalent, and it stops there. Household services are valued at the cost of replacing the work the decedent did for others, so the decedent's own share is already excluded by the way the hours are counted, and reducing that component again would deduct the same thing twice. Employer contributions to a retirement plan are a closer question: where the plan would have funded a pension the surviving spouse would have shared, the report treats the contribution as support, and where it would have funded the decedent's own retirement consumption, the deduction reaches it. The report states the treatment rather than leaving it implicit.
The household on the date of death is not the household of twenty years later. Children reach majority and leave, which makes the household smaller and the decedent's personal share larger; a spouse retires, which changes the income basis; and the decedent's own earnings grow, which moves the household along the income dimension of the table. A careful report applies the percentage year by year, changing it at the points where the household's composition would have changed, rather than fixing one figure on the date of death and carrying it across the whole horizon.
The horizon itself has two parts. Earnings, and the consumption deducted from them, run over the decedent's worklife expectancy, the years the decedent would have been working. Support to a surviving spouse from retirement income runs over the joint life expectancy of the two, and the consumption deduction applied to it reflects a two-person retired household. The worklife guide explains the first horizon, and the current life tables supply the second.
The tables need three facts from the record: the household's size on the date of death, the ages of the dependents so the changes in size can be dated, and the household's income from all earners, which the tax returns establish. The family's own account of who lived in the household and who depended on the decedent fills in what the returns do not show. Where the household's spending was unusual in a way the record documents, for example a decedent who paid the costs of a dependent parent living elsewhere, or one whose employer covered the costs a table would count as personal, the report presents the table figure and explains the departure rather than substituting an undocumented percentage.
The state's framework also enters here. In a New Jersey wrongful death claim, for instance, the survivors' pecuniary loss is read to include the value of lost household services, advice, and guidance alongside support, and the report keeps the consumption deduction on the support component and away from the others. Counsel confirms which components the venue recognizes; the economist builds each on its own footing so the trier of fact can award them separately.
The recurring errors are a flat percentage with no table behind it; a percentage read from the right table but the wrong household size, usually because dependents were counted on one date and never updated; a basis mismatch between the table and the income the percentage was applied to; a deduction taken against household services or against a survivor's own earnings; and a projection with no deduction at all, which overstates the survivors' loss by the decedent's own share and is a reliable ground for challenge. Each is visible on the face of the report, and the rebuttal guide lists the questions that expose them.
Because the percentage scales the entire earnings figure, a difference of a few points moves the total materially, so a sound report shows the present value under the percentage it adopted and under the alternative the other side is likely to argue. That presentation lets the trier of fact see what the choice does to the number, and it lets counsel on either side test the choice against the record rather than against the economist's assertion. The present value page describes the schedule on which the alternatives are shown.
Where the claim includes support from retirement income to a surviving spouse, the deduction applies to that stream as well, read for a two-person retired household rather than for the household on the date of death. The report changes the percentage at the retirement date and carries the support over the joint life expectancy.
The tax returns, for the household's income and the number of earners; the family's account of who lived in the household and depended on the decedent, with the ages of the children; and the published table the percentage is read from. Receipts and bank statements are rarely needed unless the household's spending departed from the pattern the table assumes in a way the report has to explain.
It should. The household gets smaller as children reach majority and the income basis changes at retirement, and each change moves the row the table is read from. A report that fixes one percentage on the date of death and carries it across the whole horizon has ignored the changes the record already dates.
Request a consultation on Personal Consumption in a Wrongful Death Claim or call (201) 343-0700. Plaintiff and defense counsel.