In a wrongful death case, the economic loss often stretches decades into the future — a lifetime of earnings that will never be realized. To present that loss to a court, the economist must convert future dollars into present value. The tool for that conversion is the discount rate — and small differences in the rate can move an award by hundreds of thousands of dollars.

The Math Is Powerful

Consider $1 million in lost earnings projected 20 years from now. At a 1% real discount rate, its present value is roughly $820,000. At 3%, it falls to about $554,000. Same loss, same facts — a difference of more than $260,000 driven entirely by the rate. When losses span 30 or 40 years, the gap widens further.

What Courts Expect

Courts do not accept a discount rate pulled from thin air. The rate should be grounded in evidence: yields on relatively safe investments, expressed in real (inflation-adjusted) terms, and consistent with the jurisdiction’s legal framework. Some jurisdictions prescribe or constrain the rate; others leave it to expert testimony — but in every case, the expert must explain why the chosen rate fits the facts.

Why Sensitivity Analysis Matters

Because the award is so sensitive to the rate, a careful expert tests alternative rates and shows how the bottom line changes. That transparency does two things: it demonstrates that the opinion is not fragile, and it gives counsel a clear picture of where the real exposure lies — information that is invaluable at mediation.

The discount rate is one of the few inputs in a damages model that can honestly be described as outcome-determinative. Treat it with the care it deserves: grounded in data, explained in plain language, and tested against alternatives.