The distortion of present value on the calculation of lost earnings by using the model of net discount rate originates from the fact that the level of wage display non-linear trends in Korea. This study analyzed about adopting the level of base earnin...
The distortion of present value on the calculation of lost earnings by using the model of net discount rate originates from the fact that the level of wage display non-linear trends in Korea. This study analyzed about adopting the level of base earnings from four cases and showed that the consequences are improved by the extent of smoothing on the level of wage. In the last analysis we verified that the method of adopting newly created wage series as the base earnings is predominating the other methods. In order to use this method we should perform forecast of wage series and estimate linear trend on the time series.