Did the 9/11 Victim Compensation Fund Accurately Assess Economic Losses?

Abstract

Abstract Under the September 11th Victim Compensation Fund (VCF), victims' families were provided monetary compensation based on economic and non-economic losses in exchange for giving up their right to sue U.S. entities, such as airlines. Was the Fund successful in calculating economic losses, and should it be repeated in the wake of another such attack? This paper assesses the extent to which forensic economists influenced the Special Master’s decisions. We find that, for the most part, the Special Master's economic awards before collateral offsets were bounded by the presumed award amounts and the forensic economist's calculations, with substantial variation across claimants. This result implies that the Special Master's economic awards appear to have been significantly influenced by other factors offered during the VCF hearings, raising questions about fairness if a similar process is to be repeated in the future.