Empirical Legal Studies

Referees, "Home Field" Advantages, and "Empty" Stadiums: An Empirical Perspective

If current events continue as presently trajected we are likely to see a slew of professional (and D1 college) athletic games played in "empty" stadiums for some unknown period of time. For gamblers (and fans), one immediate question is how playing in an empty stadium may impact the outcome. One piece of emerging conventional wisdom--fueled by little more than intuition--is that the putative "home field advantage" attributable to (assumed) systematic referee "bias" favoring home teams may vanish in empty stadiums.

It turns out that the "empty" stadium "experiment" has happened before--in Italian professional soccer flowing from a tragic soccer "hooligan" incident in 2007. Consequently, some data--albeit limited--exist. Perhaps unsurprisingly, two economists, Per Pettersson-Lidbom (Stockholm Univ.) and Mikael Priks' (CESifo, Germany), exploited these data, construed the temporary "empty stadium" policy as an exogenous shock to the number of spectators, and leveraged it to test the "referees may be biased due to social pressure" hypothesis.

Findings from their 2010 paper, Behavior under social pressure: Empty Italian stadiums and referee bias, generally comport with the received wisdom. Specifically, and as summarized in a recent Sports Illustrated article (here), in "full" stadiums home teams won the majority of matches. And they did so, in part, because the home teams received fewer red cards and yellow cards, and fewer penalty and foul calls. As well, when home teams were trailing, they received more injury time, the minutes that officials discretionarily tack onto the end of games, increasing their odds of catching up. When home teams were leading, injury time dwindled." However, for games played in "empty" stadiums the home team advantage effectively vanished and teams didn’t win at home any more than on the road. Contributing to this was that when no fans were in the stands the "home/away penalty differential shriveled. The favorable calls conferred on the home team dropped by 23%–70%, depending on the type of calls. Subjective close calls no longer favored the home team. Injury time favoring the home team declined as well."

While it remains difficult to conclusively rule out concurrent effects of an "empty" stadium on the athletes, the paper addresses such confounds to the extent that their research design allows. To be clear, however, the paper focuses on observing "the same referees overseeing the same two teams in the same stadium" and notes that they "behaved dramatically differently when spectators were present, versus when no one was watching." On the interpretative front the authors are generous to the referees: "It is not because officials are biased, much less because they are corrupt. It is because they are human. As such, they are susceptible to the powerful force that is social influence."

Can Technology Reduce Group-Level Litigation Disparities?

While perhaps aspirational, the court room is one context where we at the very least expect judicial proceedings to unfold in an impartial manner. Insofar as judges are humans, they, too, are vulnerable to various implicit biases. While the "digital-divide" is frequently framed in terms of how technology enhances the distance separating the proverbial "haves, and have nots," this may not be inevitable. For example, and setting aside arguments moored in economy and access, migrating judicial proceedings from the current, in-person, "bricks-and-mortar" context to online platforms that may not require "face-to-face" interactions may also, paradoxically, enhance impartiality by reducing "the salience of group identity traits."

Avital Mentovich (Haifa), J.J. Prescott (Mich.), and Orna Rabinovich-Einy (Haifa), explore this argument in Are Litigation Outcome Disparities Inevitable? Courts, Technology, and the Future of Impartiality. The authors submit their implicit bias hypotheses to "case-level data [N=5,232 cases: 2,713 face to-face; 2,519 online] using a quasi-natural experiment—the plausible exogenous adoption and implementation of online dispute resolution (ODR) procedures in two U.S. state district courts. Our data allow us to compare differences in litigation outcomes reached in face-to-face procedures relative to ODR-style hearings for civil infractions by party age, gender, and race." What they find, in part, is "evidence that is consistent with the existence of implicit or other structural biases in face-to-face proceedings; all else equal, legal outcomes appear to vary by litigant age and race but not by gender. These disparities fade with the change in medium, possibly by reducing implicit bias."

To be sure, and as the authors note, important aspects limit the force of the paper's findings. For example, the findings "emerge from a particular court system, a narrow range of case types [traffic violations], and from a specific ODR platform technology." As well, selection effects lurk as "litigants actively choose whether to pursue a traditional face-to-face proceeding, an online hearing, or nothing at all." Limitations notwithstanding, this is an important emerging trend that warrants sustained scholarly attention.

An Empirical Analysis of Entrepreneurs and Corporate Form Selection

Over the last few decades the LLC displaced the C corporation as the corporate form "of choice" for many entrepreneurs and closely-held corporations. According to many, while the C corporation benefited from comparative simplicity it was encumbered by tax disadvantages and governance "inflexibility." Despite a migration away from the C corporation among entrepreneurs, there has been quite little empirical work that directly engages with the "anti-C corporation" thesis or explores how C corporation selections distribute across entrepreneurs.

A recent paper, published in JELS, begins to fill this scholarly void. In Entrepreneurs' Legal Status Choices and the C Corporation Survival Penalty, Emily Satterthwaite (Toronto) explores whether "C corporations underperformed as compared to similarly situated businesses with alternative legal statuses." To do so the paper exploits "a large panel dataset that contains legal status, owner, business, financing, and other firm‐specific information collected from an eight‐year survey of nearly 5,000 enterprises that were formed in 2004." A summary of the paper's four key findings follow in the excerpted abstract.

"First, C corporation status is associated with firm failure rates that are 38 percent higher (significant at 0.1 percent) than those of non‐C corporations with similar characteristics. Second, this C corporation survival penalty persists at nearly the same magnitude and significance even after a subset of “anticipated cash‐exit” C corporations with (a) venture capital investors or (b) employee stock option plans are separated out. Third, nonwhite and foreign‐born entrepreneurs have a significantly higher likelihood of choosing C corporation status. Fourth, within the subset of firms that appear eligible to elect out of the default (subchapter C) corporate tax classification and into the tax‐advantaged subchapter S classification, nonwhite and older entrepreneurs are significantly more likely to remain in C corporation status. These findings suggest that increasing legal status complexity is unlikely to be neutral from a distributive perspective, and may be disproportionately burdensome for marginalized entrepreneurs."

Some of COVID-19's "Lockdown" Costs

Insofar as the COVID-19 crisis continues to unfold, in real time, scholarly efforts to study various aspects of this crisis may be somewhat premature. That said, the “floodgates” of “COVID-19” studies have already opened and are unlikely close anytime soon.

In response to the coronavirus pandemic, nearly all U.S. states issued stay-at-home orders designed to restrict the movement of people and help realize public-health dividends. The orders triggered an array of “considerable” costs, however. In The Impact of the Coronavirus Lockdown on Domestic Violence, Sarath Sanga (Northwestern) & Justin McCray (Columbia) explore one such potential cost: An increase in domestic violence. The authors exploit a database of “approximately 50 million 911 call records from 14 large U.S. cities. We also obtain mobile device location data from these same cities.” The paper’s key results are summarized in the abstract.

We use 911 call records and mobile device location data to study the impact of the coronavirus lockdown on domestic violence. The percent of people at home sharply increased at all hours, and nearly doubled during regular working hours, from 45 to 85 percent. Domestic violence increased 12 percent on average and 20 percent during working hours. Using neighborhood-level identifiers, we show that the rate of first-time abuse likely increased even more: 16 percent on average and 23 percent during working hours. Our results contribute to an urgent need to quantify the physical and psychological burdens of prolonged lockdown polices"

More "Replication" (or Data "Integrity") Problems--Medical Sciences

Just a stunning situation unfolding at The Lancet, one of medical sciences' leading scholarly journals. Setting aside the ambient politics surrounding Hydroxychloroquine's potential role as a possible treatment for COVID-19, the recent retraction of a peer-reviewed paper that received considerable public (and scientific) attention, in a matter of weeks following its publication, itself has garnered attention. Three of the paper's four authors, according to The Lancet, have concluded that they “can no longer vouch for the veracity of the primary data sources.” A helpful summary of this unfolding situation appears on Gelman's blog (here and here).