Working Paper: NBER ID: w10825
Authors: Daniel P. Kessler; Daniel L. Rubinfeld
Abstract: In this essay, we discuss empirical research on the economic effects of the civil justice system. We discuss research on the effects of three substantive bodies of law- contracts, torts, and property- and research on the effects of the litigation process. We begin with a review of studies of aggregate empirical trends and the important issues involving contracts and torts, both positive and normative. We survey some of the more interesting empirical issues, and we conclude with some suggestions for future work. Because studies involving property law are so divergent, there is no simple description of aggregates that adequately characterizes the subject. In its place, we offer an overview of a number of the most important issues of interest. We describe (selectively) the current state of empirical knowledge, and offer some suggestions for future research. The section on legal process builds on the previous substantive sections. With respect each of the steps, from violation to trial to appeal, we review some of the more important empirical contributions.
Keywords: civil justice system; contracts; torts; property law; litigation process
JEL Codes: K0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| introduction of formal contract law (K12) | enhanced competition in credit markets (E44) |
| enhanced competition in credit markets (E44) | lower interest rates (E43) |
| lower interest rates (E43) | greater efficiency in transactions (D61) |
| tort reforms (caps on damages) (K13) | reduced frequency and severity of malpractice claims (K13) |
| reduced frequency and severity of malpractice claims (K13) | impact on healthcare costs (I11) |
| higher liability pressure (K13) | increased defensive medicine practices (I11) |
| increased defensive medicine practices (I11) | inflated healthcare costs (H51) |
| no-fault insurance systems (K13) | increased accident rates (R41) |
| increased accident rates (R41) | reduced incentives for precaution (G52) |