While civil law courts of last resort—e.g., cassation courts in France, Italy, and Chile—review up to 90% of appealed cases, common law courts of last resort—e.g., supreme courts of the United States, United Kingdom, and Canada—hear as few as 1% of the same petitions. In this study, we postulate that these different policies can be explained by a comparatively larger commitment from common law courts of last resort to judicial law-making rather than judicial uniformity. While courts require few hearings to update the law (in theory one decision is sufficient), they need a large number of hearings to maximize consistency in the lower courts’ interpretation of the law. We show that the optimal number of hearings increases with an increment in the courts’ concern for uniformity. We also show that if hearing costs are linear then the hearing policies of all courts can be classified in only two types. In addition, we predict important changes in hearing policies when the number of petitions increases. Finally, we find that hearing rates and reversal disutility operate as two ways in which a legal system can achieve a given level of judicial uniformity.
{"title":"Explaining Difference in the Quantity of Cases Heard by Courts of Last Resort","authors":"Bravo-Hurtado Pablo, Álvaro E. Bustos","doi":"10.1093/ALER/AHZ008","DOIUrl":"https://doi.org/10.1093/ALER/AHZ008","url":null,"abstract":"\u0000 While civil law courts of last resort—e.g., cassation courts in France, Italy, and Chile—review up to 90% of appealed cases, common law courts of last resort—e.g., supreme courts of the United States, United Kingdom, and Canada—hear as few as 1% of the same petitions. In this study, we postulate that these different policies can be explained by a comparatively larger commitment from common law courts of last resort to judicial law-making rather than judicial uniformity. While courts require few hearings to update the law (in theory one decision is sufficient), they need a large number of hearings to maximize consistency in the lower courts’ interpretation of the law. We show that the optimal number of hearings increases with an increment in the courts’ concern for uniformity. We also show that if hearing costs are linear then the hearing policies of all courts can be classified in only two types. In addition, we predict important changes in hearing policies when the number of petitions increases. Finally, we find that hearing rates and reversal disutility operate as two ways in which a legal system can achieve a given level of judicial uniformity.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHZ008","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44099083","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
With irreversible investments in safety, changes in workers’ compensation laws should affect employer incentives asymmetrically: increases in workers’ compensation generosity should cause employers to invest more in safety, but comparable decreases might not cause them to disinvest in existing precautionary programs or equipment. Although maximum weekly benefits caps have been fairly stable, state laws have expanded or restricted workers’ compensation on multiple other dimensions. State laws may impose new requirements regarding burdens of proof, access to medical care, and the duration of benefits. This article estimates the effect of changes in these more comprehensive measures of workers’ compensation laws on workplace safety. Using confidential, restricted data from the Census of Fatal Occupational Injuries, the article finds that increases in workers’ compensation generosity lead to a significant decrease in fatality rates, while decreases in workers’ compensation generosity do not significantly increase fatality rates.
{"title":"Asymmetric Effects on Fatality Rates of Changes in Workers’ Compensation Laws","authors":"Elissa Philip Gentry, W. Viscusi","doi":"10.1093/ALER/AHZ007","DOIUrl":"https://doi.org/10.1093/ALER/AHZ007","url":null,"abstract":"\u0000 With irreversible investments in safety, changes in workers’ compensation laws should affect employer incentives asymmetrically: increases in workers’ compensation generosity should cause employers to invest more in safety, but comparable decreases might not cause them to disinvest in existing precautionary programs or equipment. Although maximum weekly benefits caps have been fairly stable, state laws have expanded or restricted workers’ compensation on multiple other dimensions. State laws may impose new requirements regarding burdens of proof, access to medical care, and the duration of benefits. This article estimates the effect of changes in these more comprehensive measures of workers’ compensation laws on workplace safety. Using confidential, restricted data from the Census of Fatal Occupational Injuries, the article finds that increases in workers’ compensation generosity lead to a significant decrease in fatality rates, while decreases in workers’ compensation generosity do not significantly increase fatality rates.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHZ007","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43042292","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the optimal nature of lawmaking under uncertainty. I focus on a case in which a harmful activity will be subjected to some regulatory measures (a standard, exposure to liability, or a corrective tax). The benefits and costs of precaution are ex ante uncertain, and this places a risk burden on both injurers and victims. The optimal policy should, at the same time, strike a balance between benefits and costs of the measures, and attenuate the ex ante risk. Whether measures should be made stronger or softer depends on the size and the sign of the shocks affecting the parties (positive or negative) and their disposition towards risk. With corrective taxes, it also depends on the elasticity of precautions with respect to the tax rate.
{"title":"Legal Change in the Face of Risk-Averse Subjects: A Generalization of the Theory","authors":"L. Franzoni","doi":"10.1093/ALER/AHZ009","DOIUrl":"https://doi.org/10.1093/ALER/AHZ009","url":null,"abstract":"\u0000 This study investigates the optimal nature of lawmaking under uncertainty. I focus on a case in which a harmful activity will be subjected to some regulatory measures (a standard, exposure to liability, or a corrective tax). The benefits and costs of precaution are ex ante uncertain, and this places a risk burden on both injurers and victims. The optimal policy should, at the same time, strike a balance between benefits and costs of the measures, and attenuate the ex ante risk. Whether measures should be made stronger or softer depends on the size and the sign of the shocks affecting the parties (positive or negative) and their disposition towards risk. With corrective taxes, it also depends on the elasticity of precautions with respect to the tax rate.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHZ009","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42140086","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Tightening corrections budgets, the lack of a legal right to in-person prison visitation, and the increasing availability of video visitation have led many prison and jail administrators to consider limiting opportunities for in-person visitation. This is concerning given the large literature which argues inmates receiving in-person visits are less likely to recidivate upon release. On the other hand, these studies have not determined whether this relationship is causal or is instead driven by the correlation between receiving visits and having a network of family and friends that can offer support upon release. In this article, I estimate the causal effect of in-person visitation on recidivism using unique, administrative data from the Iowa Department of Corrections. I find that visitation itself, as currently implemented in Iowa, has no impact on recidivism. Instead, my results suggest prison policies that create meaningful support networks available to prisoners upon release may yield significant benefits.
{"title":"Far from Home and All Alone: The Impact of Prison Visitation on Recidivism","authors":"Logan M. Lee","doi":"10.1093/aler/ahz011","DOIUrl":"https://doi.org/10.1093/aler/ahz011","url":null,"abstract":"\u0000 Tightening corrections budgets, the lack of a legal right to in-person prison visitation, and the increasing availability of video visitation have led many prison and jail administrators to consider limiting opportunities for in-person visitation. This is concerning given the large literature which argues inmates receiving in-person visits are less likely to recidivate upon release. On the other hand, these studies have not determined whether this relationship is causal or is instead driven by the correlation between receiving visits and having a network of family and friends that can offer support upon release. In this article, I estimate the causal effect of in-person visitation on recidivism using unique, administrative data from the Iowa Department of Corrections. I find that visitation itself, as currently implemented in Iowa, has no impact on recidivism. Instead, my results suggest prison policies that create meaningful support networks available to prisoners upon release may yield significant benefits.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/aler/ahz011","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43988181","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article deals with the control of hazardous activities in situations where potential victims can affect their exposure to risk. Economists have generally considered ex ante regulation (safety standards) to be a substitute for ex post policies (exposure to tort liability) in order to control externalities. We show that when the victim’s compensation is partial (e.g., due to death or serious bodily injury) there are inefficiencies associated with the exclusive use of negligence liability and that an optimal policy may involve the combined use of ex-ante regulation and ex-post liability. A noteworthy feature of our explanation is that regulation is complementary to liability, in the sense that it may facilitate a higher and more efficient standard of negligence. In that case, it is efficient to set the regulatory safety standard below the standard of negligence, which is consistent with the legal doctrines of negligence per se and the (non) regulatory compliance defense.
{"title":"The Complementary Role of Liability and Safety Regulation","authors":"Massimo D’Antoni, Avraham Tabbach","doi":"10.1093/ALER/AHZ001","DOIUrl":"https://doi.org/10.1093/ALER/AHZ001","url":null,"abstract":"This article deals with the control of hazardous activities in situations where potential victims can affect their exposure to risk. Economists have generally considered ex ante regulation (safety standards) to be a substitute for ex post policies (exposure to tort liability) in order to control externalities. We show that when the victim’s compensation is partial (e.g., due to death or serious bodily injury) there are inefficiencies associated with the exclusive use of negligence liability and that an optimal policy may involve the combined use of ex-ante regulation and ex-post liability. A noteworthy feature of our explanation is that regulation is complementary to liability, in the sense that it may facilitate a higher and more efficient standard of negligence. In that case, it is efficient to set the regulatory safety standard below the standard of negligence, which is consistent with the legal doctrines of negligence per se and the (non) regulatory compliance defense.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHZ001","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49543678","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article offers an analysis of negligence law in an environment with asymmetric information and costly signaling. We consider three possible variations of the negligence doctrine, based on its two elements—the standard of care and damages. We find that accounting for signaling costs affects the social desirability of the negligence rule. In a nontrivial number of cases, the social costs are lowest under the variation of the negligence regime in which the standard of care is the same for all types of victims but damages vary according to the victim’s type. This analysis provides an efficiency-based justification for the use of negligence doctrine in bodily injuries and wrongful death cases, a practice that has been considered one of the greatest “misalignment puzzles” in negligence law.
{"title":"Informational Negligence Law","authors":"Alon Cohen, Avraham Tabbach","doi":"10.1093/ALER/AHZ002","DOIUrl":"https://doi.org/10.1093/ALER/AHZ002","url":null,"abstract":"This article offers an analysis of negligence law in an environment with asymmetric information and costly signaling. We consider three possible variations of the negligence doctrine, based on its two elements—the standard of care and damages. We find that accounting for signaling costs affects the social desirability of the negligence rule. In a nontrivial number of cases, the social costs are lowest under the variation of the negligence regime in which the standard of care is the same for all types of victims but damages vary according to the victim’s type. This analysis provides an efficiency-based justification for the use of negligence doctrine in bodily injuries and wrongful death cases, a practice that has been considered one of the greatest “misalignment puzzles” in negligence law.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHZ002","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43123934","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How much do market participants in different industries value a marginal change in patent term (i.e., duration of patent protection)? We explore this research question by measuring the behavioral response of patentees to a rare natural experiment: a change in patent term rules, due to passage of the TRIPS agreement. We find significant heterogeneity in patentee behavior across industries, some of which follows conventional wisdom (patent term is important in pharmaceuticals) and some of which does not (it also appears to matter for some software). Our measure is highly correlated with patent renewal rates across industries, suggesting the marginal value of patent term increases with higher expected profits toward the end of term.
{"title":"Who Cares About Patents? Cross-Industry Differences in the Marginal Value of Patent Term","authors":"N. Sukhatme, Judd N. L. Cramer","doi":"10.1093/ALER/AHZ004","DOIUrl":"https://doi.org/10.1093/ALER/AHZ004","url":null,"abstract":"How much do market participants in different industries value a marginal change in patent term (i.e., duration of patent protection)? We explore this research question by measuring the behavioral response of patentees to a rare natural experiment: a change in patent term rules, due to passage of the TRIPS agreement. We find significant heterogeneity in patentee behavior across industries, some of which follows conventional wisdom (patent term is important in pharmaceuticals) and some of which does not (it also appears to matter for some software). Our measure is highly correlated with patent renewal rates across industries, suggesting the marginal value of patent term increases with higher expected profits toward the end of term.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/ALER/AHZ004","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49395331","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A Theoretical Framework for Law and Macroeconomics","authors":"Yair Listokin","doi":"10.1093/aler/ahy011","DOIUrl":"https://doi.org/10.1093/aler/ahy011","url":null,"abstract":"","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138528726","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"OUP accepted manuscript","authors":"","doi":"10.1093/aler/ahz005","DOIUrl":"https://doi.org/10.1093/aler/ahz005","url":null,"abstract":"","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"60727326","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the heterogeneous impact of state exemption laws and state garnishment laws on bankruptcy. Using a new household level dataset, my empirical specification simultaneously examines the impact these laws have on a household’s bankruptcy decision as well as a household’s assets and unsecured debts. I find that high exemption laws have a positive impact on bankruptcy and that this effect is increasing in assets. Additionally, I find that high garnishment rates have a positive impact on bankruptcy, which is increasing in income. Moreover, I examine the policy implications of standardizing state exemption laws and state garnishments laws. Understanding the heterogeneous effects of these laws is crucial as they suggest that a household with a given set of financial characteristics will seek bankruptcy relief if it resides in one state but will have to use alternative consumption smoothing measures if it lives in a different state.
{"title":"Who Files for Bankruptcy? The Heterogeneous Impact of State Laws on a Household's Bankruptcy Decision","authors":"Michelle M. Miller","doi":"10.2139/ssrn.1983503","DOIUrl":"https://doi.org/10.2139/ssrn.1983503","url":null,"abstract":"This paper examines the heterogeneous impact of state exemption laws and state garnishment laws on bankruptcy. Using a new household level dataset, my empirical specification simultaneously examines the impact these laws have on a household’s bankruptcy decision as well as a household’s assets and unsecured debts. I find that high exemption laws have a positive impact on bankruptcy and that this effect is increasing in assets. Additionally, I find that high garnishment rates have a positive impact on bankruptcy, which is increasing in income. Moreover, I examine the policy implications of standardizing state exemption laws and state garnishments laws. Understanding the heterogeneous effects of these laws is crucial as they suggest that a household with a given set of financial characteristics will seek bankruptcy relief if it resides in one state but will have to use alternative consumption smoothing measures if it lives in a different state.","PeriodicalId":46133,"journal":{"name":"American Law and Economics Review","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67828850","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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