Modelling the Construction Accident Cases via Structural Equation Modelling
Construction accident compensation is one of the most critical factors that motivate contractors and clients to provide sufficient safety measures for workers. A court will usually collect information about the average monthly earnings of the workers before the accident to evaluate their working ability and consider the effects of injury on their productivity; this is to provide a fair judgment relating to the compensation items. Regarding the level of compensation, most compensation categories such as PSLA, pretrial loss of earning and future treatment are reflected in the level of compensation. The more severe the injury caused by accident, the more is the compensation for the future loss. Besides, even though there are few studies concerning the economic aspects of tort, there is a distinct lack of studies on the factors that affect the compensation. This chapter fills this academic void by utilising a structural equation modelling approach. Accident compensation court cases dated from 1982 to 2015 in Hong Kong were collected. 14 categories of information (including the level of injury as a ‘latent’ or unmeasurable variable) were recorded and used to construct the model which was then used for compensation estimation.
An earlier version of the paper was presented in European Real Estate Society Conference 2017.
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