Empirical Legal Studies

ELS Blog Listed #10 in Top 50 Law Blogs

I had never heard of CollegeDegrees.com, but they've ranked the Top 50 Law Blogs, and the ELS Blog is ranked #10. 

See http://www.collegedegrees.com/blog/2008/05/28/legal-counsel-top-50-law-school-blogs/.

The Top 12, as described by their website, are as follows:

1. The Volokh Conspiracy. This popular blog features UCLA professor Eugene Volokh as well as contributions from others. The topics tend to focus on Volokh’s specialties, so look for legal news as it pertains to freedom of speech, freedom of religion, criminal law, and church-state relations.
2. Prawfsblawg. Seven professors from seven different law schools collaborate on this blog. Recent posts included breaking into the academic job market, adolescent sexuality and the law, and the value of a foreign employee’s job in respect to free trade with the U.S.
3. Law Culture. Visit this blog if you enjoy a wide range of legal stories ranging from academic gossip, torture, popular culture, and racism in the presidential campaign. Even those outside the law school environment will enjoy the posts written by professors from such heavy hitters as Harvard, Yale, Princeton, Georgetown.
4. BlackProf.com. Focusing on "race, culture, and society," this blog touches on more than just the law. A few recent posts report on the gangsta lifestyle going to court and a controversial cover of Vogue.
5. Legal Theory Blog. This blog provides links to published papers focusing on various legal theory topics. Lawrence B. Solum, professor of both law and philosophy at the University of Illinois keeps this running list of papers up to date.
6. Law Blog. This blog is a part of the Wall Street Journal and covers the overlap of business and legal subjects. While technically not a law school blog, the WSJ tends to be a favorite among lawyers and law students.
7. Concurring Opinions. Describing itself as "a general-interest legal blog," the professors who contribute to this blog cover a wide variety of legal topics. Also included are postings with recent cover pages and links to several prominent law reviews.
8. The Becker-Posner Blog. These two well-known experts each offer their opinions on the same topic. Recent posts have covered the airline industry, the food shortage/biodiesel debate, and executive compensation. Don’t worry if you lose the link to this popular blog–it’s available on several blogrolls.
9. Balkinization. With a heavy dose of academia, this blog covers current legal topics. Due to the nature of several contributors frequently all commenting on the same subjects, this blog offers a variety of prospectives.
10. Empirical Legal Studies. This site is devoted to bringing together "empirical methodologies and legal theory." It’s not all statistics and data here, though, as they also offer news from the world of legal empiricists.
11. Above the Law. On a decidedly lighter note, yet still a serious site, this "legal tabloid" offers distractions such as Jobs of the Week, Judge of the Day, and Nina Totenberg sightings.
12. Brian Leiter’s Law School Reports. This interesting blog will draw you in with news, links, interesting facts, and even details of professors’ comings and goings among law schools. You are sure to enjoy reading this popular professor from the University of Texas Law School.

The Case of the Gasoline Tax

Recently posted on SSRN: Hsu, Shi-Ling, "Carbon Tax Heuristics and Politics: The Case of the Gasoline Tax" (April 15, 2008). Available at SSRN: http://ssrn.com/abstract=1121039

Abstract:   Economists are beginning to form a consensus that the most effective and cost-effective way to reduce global greenhouse gas emissions is through a carbon tax. The insight of economists and other policy analysts is that in the greenhouse gas context, the design of cap-and-trade programs creates so many opportunities for rent-seeking that they may not be very cost-effective, and may not reduce greenhouse gas emissions at all. The appeal of carbon tax proposals is that they are so simple and sensible that rent-seeking would have to be very audacious to succeed.

Carbon tax proposals, however, have divided economists from almost everybody else. In particular, an exceptionally effective and efficient carbon tax, the gasoline tax, has been even more unanimously supported by economists and even more virulently opposed by almost everyone else. This Article explores some of the psychological barriers to public acceptance of gasoline tax increases, and also examines a political economy theory that has been propounded to explain a uniquely North American hostility towards gasoline taxes. An empirical analysis is undertaken, using a survey instrument to examine public attitudes towards gasoline taxes as a means of reducing emissions from motor vehicles. The concept of "revenue recycling" gasoline tax proceeds is tested for public acceptance, as well as other hypotheses pertaining to cognitive barriers to understanding gasoline taxes. As well, economic and demographic factors are examined to study the implications of the one political economic theory of why gasoline taxes are so virulently opposed in North America.

Behavioral Economics Primer

I recently ran across this audio file of a talk given at Harvard Law School in 1995 by Charles Munger, entitled "Causes of Human Misjudgment."   Munger is a Harvard Law alum and a founding partner of the L.A. law firm of Munger, Tolles & Olsen.  He later left the firm to run an investment fund.  In the mid-1970s, he joined Berkshire Hathaway to serve as Vice-Chairman with Warren Buffett.

Make no mistake:  Munger is explicitly talking about the intersection of economics and psychology, acknowledging that the nascent (at the time) field of behavioral economics was on the right path and citing insights of Daniel Kahneman and Amos Tversky (note seven years before Kahneman won the Nobel Prize).

I am particularly interested in applied behavioral economics.  And here I don't mean writing papers on the topic;  rather, I mean honing my own decisionmaking processes to eliminate bias and susceptibility to manipulation.  For this purpose, I doubt I will ever find a better resource.  A written version of this talk, including an interesting preface, is online here.   It has quite a few things to say about academia and the pervasive problem of the "truffle hound."  (You will have to read/listen to the links to figure out the truffle hound reference.) 

Finally, Munger's remarks inspired Paul Brest (Hewlett Foundation, former dean at Stanford) and Laura Hamilton Krieger (UC Berkeley) to create a law school  course on professional judgment and decisionmaking at Stanford Law.  The course began in the early 1990s and continues to this day (materials are online at www.professionaljudgment.org).   Several prominent behavioral law & econ scholars took this course while students at Stanford, including Russell Korobkin (UCLA), Jeff Rachlinski (Cornell), and Chris Gurthie (Vanderbilt).    In case there was any doubt, cornerstones of the course appear to be empiricism, applied probability theory, and due attention to disconfirmatory evidence in the face of cognitive biases.  Great stuff.

Science and the Law

For those interested in the continued (and sometimes difficult) relationship between science and the law, I encourage you to check out my Vermont Law School colleague Craig Pease's regular "Science and the Law" column in The Environmental Forum.  Check out the latest edition entitled The Absurdity of Individual Harm.

More on Med Mal: Data on the Massachusetts Experience

As many know, a major policy debate concerns state legislation capping damage awards for medical malpractice.  Such cap proposals presume a malpractice insurance premium crisis.  Conventional wisdom suggests that many physicians leave practice, move states, etc. and that there needs to be changes in law to address this problem.  Proposals include federal tax credits for malpractice premiums and changes in liability law.  Such proposals emerge despite a relative paucity of available premium data.

In Malpractice Premiums In Massachusetts, A High-Risk State: 1975 To 2005, Marc Rodwin (Suffolk) et al. analyze malpractice premiums from 1975 to 2005 using data from the state-regulated mutual insurer, ProMutual Group.  Their findings largely clash with popular perceptions and assumptions underlying legislative proposals to cap damages awards.  In Massachusetts nearly all Bay State physicians paid lower inflation-adjusted malpractice premiums in 2005 than in 1990.  Mean premiums increased only in three specialties comprising 4 percent of physicians: obstetrics, neurology, and orthopedists performing spinal surgery.

Follow-up on Warren Buffett and Efficient Market Theory

My recent post on Warren Buffett generated some very interesting comments that qualified and corrected my initial remarks.  One reader sent in along the following analysis, which he agreed to let me post:

Here are some data that you can use to compare Buffett’s returns to the private equity universe.  These data come from S-1s filed by these two private equity groups in connection with their IPOs.  As I mentioned in my post, given Buffett’s recent investing style – (i) he buys entire companies rather than passive minority stakes, (ii) he buys in negotiated transactions rather than at-the-market and (iii) he uses substantial leverage from the float on his reinsurance business – he looks more like KKR than Fidelity.  How do his returns compare to the returns from these two private equity players?

• Blackstone:  gross IRRs since inception [1987] -- 30.7% [see SEC filing]
  

• Apollo:  “We have consistently produced attractive investment returns for our investors, with our private equity funds generating a 40% gross IRR … from inception [1990] through December 31, 2007" [see SEC filing]

Wash U's Center for Empirical Research in the Law

Wash U's current (law) alumni magazine features its Center for Empirical Research in the Law (CERL). With CERL, founded in 2006, the folks at Wash U institutionally formalized its long-standing commitment to interdisciplinary and empirical legal studies. Such an undertaking warrants attention. As the website describes, CERL:

"supports application of sophisticated empirical methodology to legal studies research. Housed in Washington University's Law School, CERL provides research infrastructure to affiliated projects and supports the research activities of faculty and students throughout the university. CERL-affiliated faculty also train law students, doctoral students, and legal academics in empirical methods through workshops and traditional courses."

Indiana Law Reception in Montreal May 30

Friday, May 30, 2008
6:30 pm - 8:30 pm

Restaurant Julien
1191, Avenue Union
Montreal (Quebec) H3B 3C3

Readers of the ELS Blog are invited to join Dean Lauren Robel and members of the Indiana Law faculty for a reception in conjunction with the 2008 Law and Society Association Annual Meeting. The gathering is a great opportunity to network, socialize, and enjoy hors d'oeuvres and drinks. We hope you can join us.

We would appreciate an RSVP by May 26 to [email protected] or 812-855-9700; feel free to attend even if you are not able to RSVP now.

BJS Report on Felony Defendants

Another recent BJS report, Felony Defendants in Large Urban Counties, 2004, analyzes data collected from a representative sample of felony cases filed in the nation's 75 largest counties during May 2004. Murder cases were tracked for up to 2 years and all other cases for 1 year to provide an overview of the processing of felony defendants from case filing to disposition and sentencing. Data highlight the demographic characteristics of felony defendants and types of arrest charges. The report also includes in-depth information on the criminal record of felony defendants, including criminal justice status at the time of arrest and the number and type of prior arrests and convictions. It describes conditions of pretrial release (bail amounts, type of release bonds, and pretrial misconduct), adjudication outcomes (dismissal, diversion, guilty plea, trial conviction rates), and sentencing data for convicted felony defendants. Notable findings include:

• Two-thirds of felony defendants were charged with a drug or property offense.
• More than three-fourths of felony defendants had a prior arrest history, with 53% having at least five prior arrest charges.
• Fifty-seven percent of felony defendants received a pretrial release prior to adjudication.

Warren Buffett and Efficient Market Theory

I like Warren Buffett--or at least his public persona and mythology--for a lot of reasons.  He makes a lot of money without much use for computers or technology, he claims to invest only in what he understands (e.g., insurance, candy, etc.), he treats people with respect (including his shareholders), and he says that his taxes are too low.  Buffett also agreed to give away 85% of this wealth to the Bill & Melinda Gates Foundation upon his death.  He could have built a monument to himself, but instead he concluded that his money would go further by giving it to Gates. 

But my favor reason might be in the below abstract from a top-ranked paper on SSRN: that  Warren Buffett et al.'s 31 year track record is not consistent with Efficient Market Theory.    See Gerald S. Martin (American/Texas A&M) & John Puthenpurackal (UNLV), Imitation is the Sincerest Form of Flattery: Warren Buffett and Berkshire Hathaway:

We analyze Berkshire Hathaway's equity portfolio over the 1976 to 2006 period and explore potential explanations for its superior performance. Contrary to popular belief, we find Berkshire Hathaway invests primarily in large-cap growth rather than "value" stocks. Over the period the portfolio beat the benchmarks in 27 out of 31 years, on average exceeding the S&P 500 Index by 11.14%, the value-weighted index of all stocks by 10.92%, and a Fama and French characteristic-based portfolio by 8.56% per year. Although beating the market in all but four years can statistically happen due to chance, incorporating the magnitude by which the portfolio beats the market makes a luck explanation extremely unlikely even after taking into account ex-post selection bias. We find that Berkshire Hathaway's portfolio is concentrated in relatively few stocks with the top five holdings averaging 73% of the portfolio value. While increased volatility is normally associated with higher concentration we show the volatility of the portfolio is driven by large positive returns and not downside risk. The market appears to under-react to the news of a Berkshire Hathaway stock investment since a hypothetical portfolio that mimics the investments at the beginning of the following month after they are publicly disclosed also earns significantly positive abnormal returns of 10.75% over the S&P 500 Index. Our evidence suggests the Berkshire Hathaway triumvirates of Warren Buffett, Charles Munger, and Lou Simpson possess investment skill unlikely to be explained by Efficient Market Theory.

So here is my question:  If you know how to make money like Buffett et al., what would you do:  apply the strategy in the market and make supra normal returns, or publish it all in a finance journal to settle an academic debate (and ruining the strategy prospectively)?

BJS Report on Domestic Violence

The Bureau of Justice Statistics (BJS) recently released State Court Processing of Domestic Violence Cases, a report (along with links to underlying data) that examines the processing of domestic violence (DV) and non-domestic violence (non-DV) cases filed in May 2002 in 15 large urban counties. In particular, the study compares the domestic and non-domestic offenses of sexual and aggravated assault on 11 prosecution, conviction, and sentencing outcome measures. Data are also presented regarding court issued protection orders, guilty plea versus trial convictions, and the demographic characteristics of domestic violence defendants. Major findings include:

• A third of violent felony defendants were charged with domestic violence.
• Prosecuted domestic sexual assault defendants had a higher overall conviction rate (98%) than prosecuted non-domestic sexual assault defendants (87%).
• Domestic aggravated assault defendants (54%) were less likely to be granted pretrial release than non-domestic aggravated assault defendants (62%).

Best Practices of Structuring a Faculty Workshop (that includes students!)

Over at TaxProf, Paul Caron has posted an immensely thoughtful commentary by Neil Buchanan (George Washington Law) on how to structure a faculty tax policy workshop that includes students.  Having participated in empirical studies workshop at Illinois that followed a similar format,  I want to strenuously endorse Neil's comments and assert that his insights need not be limited to tax policy.  Neil writes:

[O]ne of the great values of holding tax policy workshops in law schools is that we embrace an interdisciplinary approach to scholarship. Bringing together scholars, convenors, and commentators with different scholarly backgrounds (within law as well as in related fields) is our greatest strength. We do ourselves and our students [emphasis added] a great favor by being mindful not to allow our discussions to be dominated by the methodologies or assumptions of any single field of study. It is very heartening to see the interdisciplinary approach to tax policy [my edit] scholarship flowering across the country. I hope that the trend of encouraging this through tax policy workshops [involving students] at more and more law schools continues.

My efforts to organize a mini-subfield conference within a conference at Law & Society each year are based on a similar model perfected by Neil Buchanan.   In my book, he is a real thought leader.

More accurate than the polls? A Model for Predicting IN and NC Primary Results

Wondering, like me, whether the polls in the Democratic primary can be trusted?  Over at the Social Science Statistics Blog, statistics whiz Kevin Bartz has posted two very interesting models for predicting results of the Indiana and North Carolina primary.   Bartz mines a huge amount of county-level data, including likely voter turnout, and his models purport to explain between 84% and 99% of prior results from Ohio, Pennsylvania, and Virginia.  (Because his S.E. is 5%, Bartz qualifies that the "results could be shaky at the county level.")

Here are Kevin's projections:

• Indiana: Clinton 53.5%, Obama 46.5%; turnout 950,000
• North Carolina: Obama 58%, Clinton 42%; turnout 1,200,000

16% seems like a huge margin for Obama--indeed, if the above numbers are even close to right, Obama (who I had for Con Law in the fall of 2000) will likely add to his lead in pledged delegates.  If so, then perhaps we can wind up a protracted primary season that is no longer serving the interests of the Democratic Party (granted, that is just my opinion).  Kevin explains the differences between his models and the polls:

How do my results stack up against the current polls? In Indiana, the RealClearPolitics average has Clinton +6%, only a point from my prediction. In North Carolina, the RCP average has Obama +8%, significantly below my predicted 16% victory. Two factors shed light on this discrepancy:

• In neighboring South Carolina, the polling average had Obama +11.6% and he won by 28.9%.
• In neighboring Virginia, the polling average had Obama +17.7% and he won by 28.2%.
• So perhaps my analysis isn't so crazy putting Obama above what the polls say in NC.

Here is what Kevin's predictions look like using GIS mapping:

Conducting Empirical Legal Scholarship Workshop, June 23-25

On Monday, June 23, 2008 through Wednesday, June 25, 2008 Lee Epstein and Andrew Martin will be teaching their annual Conducting Empirical Legal Scholarship workshop. This workshop will be held in Chicago, and is co-sponsored by Northwestern University and Washington University.

There is more information available about the workshop here:

http://www.law.northwestern.edu/faculty/conferences/empiricalworkshop.html

The Conducting Empirical Legal Scholarship workshop is for law school and social science faculty interested in learning about empirical research. The instructors provide the formal training necessary to design, conduct, and assess empirical studies, and to use statistical software (Stata) to analyze and manage data. Participants need no background or knowledge of statistics to enroll in the workshop. Topics to be covered include research design, sampling, measurement, descriptive statistics, inferential statistics, and linear regression.

Please visit the website for all logistical details.