Empirical Legal Studies

More Evidence of a Racialized Death Penalty

Notably, race does not emerge as a central concern in the Court’s Furman decision, now more than fifty years old. In the decades since Furman, however, empirical evidence continues to mount documenting that "racial discrimination infects the administration of the death penalty." A recent paper by Jeffrey Fagan et al. (Columbia), Getting to Death: Race and the Paths of Capital Cases after Furman, represents a recent and important contribution to this literature. Researchers visited each judicial circuit in Georgia to record the details of every murder case that entered the courts from 1994–2005. Analyses of the 1,317 death-eligible murders suggest that “race continues to matter, and that the statutory aggravators that distinguish death cases from other killings are themselves racialized.” A more detailed description of the paper's core findings appears in the Abstract (below).

“Decades of research on the administration of the death penalty have recognized the persistent arbitrariness in its implementation and the racial inequality in the selection of defendants and cases for capital punishment. This Article provides new insights into the combined effects of these two constitutional challenges. We show how these features of post-Furman capital punishment operate at each stage of adjudication, from charging death-eligible cases to plea negotiations to the selection of eligible cases for execution and ultimately to the execution itself, and how their effects combine to sustain the constitutional violations first identified 50 years ago in Furman. Analyzing a dataset of 2,328 first- degree murder convictions in Georgia from 1995–2004 that produced 1,317 death eligible cases, we show that two features of these cases combine to produce a small group of persons facing execution: victim race and gender, and a set of case-specific features that are often correlated with race. We also show that these features explain which cases progress from the initial stages of charging to a death sentence, and which are removed from death eligibility at each stage through plea negotiations. Consistent with decades of death penalty research, we also show the special focus of prosecution on cases where Black defendants murder white victims. The evidence in the Georgia records suggests a regime marred less by overbreadth in its statute than capriciousness and randomness in the decision to seek death and to seek it in a racially disparate manner. These two dimensions of capital case adjudication combine to sustain the twin failures that produce the fatal lottery that is the death penalty.”

Data on Whether Lawyers Add Value in IPOs

A common complaint is that lawyers provide the "grit" while the I-bankers provide the "grease" when it comes to commercial transactions, especially IPOs. Existing research on lawyers' transactional roles focuses on two alternative perspectives: The skilled advice and the passive execution hypotheses. To test these two competing hypotheses, in a recent paper, Do Lawyers Matter in Initial Public Offerings?, Bates (ASU--Finance) et al. draw from the Thomson Financial Securities Data Company (SDC) new issues database to identify U.S. IPOs over the period of 1986–2016. After filtering, the study's final sample includes data on 7,460 IPOs.

What the paper finds may--or may not--surprise. Specifically, the results imply that issuer law firm fixed effects account for an "economically significant portion of the variation in IPO outcomes, even after accounting for underwriter fixed effects." Specifically, the paper notes that "legal advisor fixed effects explain approximately 16.7% of the variation in IPO underpricing, which is about 70% of the variation attributable to underwriters documented in this and prior studies." Thus, if these effects are real, the paper evidences "the economic importance of legal advisors in the IPO process." The abstract follows.

"This study provides novel evidence that law firms representing issuers have a material impact on economic outcomes in the IPO market. Fixed effects for legal counsel explain a significant portion of the variation in IPO underpricing, comparable to underwriter fixed effects documented in prior studies. Issuer law firms also exhibit differential skill in moderating the likelihood of IPO-related litigation, and have an idiosyncratic influence on the structure of IPO disclosures. Accounting for endogenous selection, we document that law firms associated with lower rates of IPO-related litigation are also associated with less first-day underpricing and receive higher fees from their clients."

An Online Resource of Note

For those new to ELS, and even those with more sophisticated questions, UCLA's statistical consulting site, festooned with an array of resource links (here), remains quite helpful. While the site continues to evolve over time, some well-organized and useful links will help orient and guide those engaged in ELS-related work. Examples include a quick reference chart on "choosing the correct statistical test" (which includes command syntax for SAS, Stata, SPSS, & R), illustrated examples of how to interpret annotated output for standard commands, and robust "FAQ" links that are, again, program-specific (complemented by a "general FAQ" link (here)).

Judges' Financial Holdings, Case Outcomes, and Recusal

Fundamental to the notion of a fair trial and the rule of law is the principle that a judge shall apply the law impartially and free from the influence of any personal biases. When real or perceived conflicts of interest emerge, judges are expected to recuse themselves. Despite such an expectation, however, recent Wall Street Journal reporting revealed many cases where judges violated U.S. law and judicial ethics (28 U.S.C. Section 455) by overseeing cases that involve companies in which they or their family-owned stock. Unsurprisingly, several of the cases with conflicts have been appealed.

While Chief Justice John Roberts downplayed the significance of the Wall Street Journal reporting, characterizing the judges' failures to recuse as "isolated violations" and "unintentional oversights," empirical explorations of the potential influence of judges' financial holdings on case outcomes remain rare. To address this scholarly gap, a recent paper, Judge Financial Holdings and Case Outcomes: Evidence from Judge Financial Disclosures, examines whether there is a relation between the financial holdings of judges and the outcomes of the trials over which they preside.

To construct the judges' investment data set, Harit (Univ. Texas-Dallas—mgmt.) et al. extracted judge financial disclosure data from the Free Law Project website. Their sample includes 33,726 annual disclosure reports involving 3,250 federal judges from 2000 to 2020. The authors lever the random assignment of cases to judges and examine whether a judge's rulings are related to his or her stock ownership in one or more of the parties in the case. The paper finds robust evidence that judges rule more favorably and take longer when deciding over conflicted cases as compared to unconflicted ones. It also notes that investors are positively surprised by these outcomes. The abstract follows.

"This paper examines the association between a judge's financial holdings and the outcome of legal cases. Using novel data on financial disclosures of judges and the civil case information of public firms across district courts in the United States between 2000 and 2021, we document multiple instances in which judges fail to recuse themselves in cases where they hold common stock. We find robust evidence that judges rule more favorably and take longer when deciding over conflicted cases as compared to unconflicted ones. We also find that investors are positively surprised by these outcomes, as reflected by stock returns to trial outcomes. Collectively, our results provide the first large-scale evidence of the relation between judges' financial holdings and case outcomes."

Interpreting DID Output

While one may quibble about how the questioner designed her DID estimation, the question itself--how to understand and interpret standard DID output (in Stata)--elicited some helpful replies in a recent StataList discussion (here).