Working Paper: NBER ID: w12086
Authors: Patricia Born; W. Kip Viscusi; Tom Baker
Abstract: Whereas the literature evaluating the effect of tort reforms has focused on reported incurred losses, this paper examines the long run effects using a comprehensive sample by state of individual firms writing medical malpractice insurance from 1984-2003. The long run effects of reforms are greater than insurers' expected effects, as five year developed losses and ten year developed losses are below the initially reported incurred losses for those years following reform measures. The quantile regressions show the greatest effects of joint and several liability limits, noneconomic damages caps, and punitive damages reforms for the firms that are at the high end of the loss distribution. These quantile regression results show stronger, more concentrated effects of the reforms than do the OLS and fixed effects estimates for the entire sample.
Keywords: No keywords provided
JEL Codes: K13; G22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| tort reforms (K13) | ultimate losses (G33) |
| joint and several liability limits (K13) | ultimate losses (G33) |
| tort reforms (K13) | developed losses (G33) |
| tort reforms (K13) | reported losses (G33) |
| noneconomic damages caps (K13) | overall level of awards and settlements (K41) |
| tort reforms (K13) | long-term impact on losses (G33) |
| limits on noneconomic damages (K13) | ultimate losses (G33) |