Empirical Legal Studies

Misdemeanor (Non) Prosecution

Hidden in plain sight is a significant amount of criminal misdemeanor activity in state courts. Indeed, "every year approximately 13 million Americans are charged with misdemeanor offenses, and misdemeanor cases make up over 80 percent of the cases processed by the U.S. criminal justice system." Scholars and policymakers increasingly raise concerns with the sheer volume of prosecutions for low-level offenses. As well, "some district attorneys across the country have begun to implement alternatives to misdemeanor prosecution, particularly for nonviolent defendants."

As scholarly attention continues to focus on criminal misdemeanors (see, e.g., here), it is inevitable that larger data sets and more sophisticated analyses emerge. One such example includes a recent paper, Misdemeanor Prosecution. In it, Agan (Rutgers--econ) et al., assess a practice in the Suffolk County (MA) District Attorney's Office that imposes upon prosecutors a "presumption of nonprosecution" for "nonviolent misdemeanor offenses." To do so, the paper exploits "new data [N=67,553] on the prosecution of nonviolent misdemeanor criminal complaints from the Suffolk County District Attorney’s Office (SCDAO) in Massachusetts between 2004 and 2018 to estimate the impact of nonprosecution of nonviolent misdemeanors on future criminal justice system contact." (emphasis added)

Despite some missing ADA-level data concerns, one main result is that: "increasing nonprosecution reduced the likelihood of subsequent criminal complaints within a one-year post-arraignment window. In addition, there does not appear to have been an increase in reported crime due to the policy change." The abstract follows.

"Communities across the United States are reconsidering the public safety benefits of prosecuting nonviolent misdemeanor offenses. So far there has been little empirical evidence to inform policy in this area. In this paper we report the first estimates of the causal effects of misdemeanor prosecution on defendants' subsequent criminal justice involvement. We leverage the as-if random assignment of nonviolent misdemeanor cases to Assistant District Attorneys (ADAs) who decide whether a case should move forward with prosecution in the Suffolk County District Attorney's Office in Massachusetts. These ADAs vary in the average leniency of their prosecution decisions. We find that, for the marginal defendant, nonprosecution of a nonviolent misdemeanor offense leads to large reductions in the likelihood of a new criminal complaint over the next two years. These local average treatment effects are largest for first-time defendants, suggesting that averting initial entry into the criminal justice system has the greatest benefits. We also present evidence that a recent policy change in Suffolk County imposing a presumption of nonprosecution for a set of nonviolent misdemeanor offenses had similar beneficial effects: the likelihood of future criminal justice involvement fell, with no apparent increase in local crime rates."

More Stata Plotting Options

The newly-released subsetplot command produces an array of scatter or other twoway plots for sub-groups of data. As Nick Cox observes (here): "We all know that if you want to compare relationships graphically between groups of observations, we can superimpose different groups in a single plot, or juxtapose different groups in several plots. This [the subsetplot command] is a hybrid approach combining elements of those two strategies."

To illustrate, consider the following plot of auto weight by MPG:The subsetplot command plots these same data across a selected sub-grouping's outcomes (below, by auto repair record groupings (1-5)):For those interested, to download the [Stata] command type:

ssc install subsetplot

Data on Insider "Giving"

When corporate insiders learn about material, non-public bad news at their company that devalues stock prices, they can avoid losses by selling their stock before the public finds out. This form of “insider trading,” is, of course, illegal and risky. But selling stock is not the only way for corporate insiders to cash out. One alternative strategy, which is almost as financially effective and benefits from comparatively less onerous reporting requirements and legal restrictions, involves donating the stock to a charity and taking a tax deduction at the stock's inflated price. While a financial "second-best" strategy, "insider giving" nonetheless endures as a plausibly potent substitute for insider trading.

In Insider Giving, Sureyya B. Avci (Sabanci Univ.--Business) et al., submit their "insider giving" hypothesis to data. As the paper describes, the dataset includes "all reported gifts of common stock and contains over 9,000 observations between 1986 and 2020. The total volume of gifts contained in our dataset is approximately 2.1 billion shares, with a dollar value of approximately $50 billion." And what they find is that "large shareholders’ gifts are suspiciously well timed. Stock prices rise abnormally about 6% during the one-year period before the gift date and they fall abnormally by about 4% during the one year after the gift date, meaning that large shareholders tend to find the perfect day on which to give."

Rather than ascribe these finding to insider-donors' incredible good luck, the paper instead develops two possible alternative explanations: "information leakage" and "backdating." Specifically, "executives seem to provide large shareholders with material non-public information, who then use it to time gifts. We also find a second explanation to be supported, though its magnitude is smaller – backdating. The telltale sign of backdating is that the givers’ extraordinary luck tends to grow alongside the delay they take in reporting the gift. A donor who waits a few weeks to report a gift can cherry pick the very best date to retroactively claim their gift was consummated. That is precisely what we find." An excerpted abstract follows.

"Corporate insiders can avoid losses if they dispose of their stock while in possession of material, non-public information. One means of disposal, selling the stock, is illegal and subject to prompt mandatory reporting. A second strategy is almost as effective and it faces lax reporting requirements and legal restrictions. That second method is to donate the stock to a charity and take a charitable tax deduction at the inflated stock price. “Insider giving” is a potent substitute for insider trading. We show that insider giving is far more widespread than previously believed. In particular, we show that it is not limited to officers and directors. Large investors appear to regularly receive material non-public information and use it to avoid losses. Using a vast dataset of essentially all transactions in public company stock since 1986, we find consistent and economically significant evidence that these shareholders’ impeccable timing likely reflects information leakage. We also document substantial evidence of backdating – investors falsifying the date of their gift to capture a larger tax break….”

6th Annual TAU Workshop for Junior Scholars--Call For Papers (and Optimism)

With the shared hope that some semblance of "healthy normalcy" will return to all sometime soon, I pass along the following Call For Papers.

The Tel Aviv University Buchmann Faculty of Law is pleased to invite submissions to its sixth junior legal scholar workshop. The workshop provides junior scholars with the opportunity to present and discuss their work, receive meaningful feedback from faculty members and peers, and actively participate in an international community of junior legal scholars.

"The upcoming 2021 TAU workshop for junior scholars in law, which will be held in Tel-Aviv University Law School on November 14-16, 2021, will be dedicated to 'Legal Change in Revolutionary Times.' We are seeking cutting-edge works in progress, in varied legal fields and written from a variety of methodological and theoretical perspectives, that investigate the role of law in revolutionary times, and we welcome works that broadly relate to the core themes of the workshop."

Conference organizers expressly welcomes proposals from: "doctoral candidates, and recent graduates of doctoral programs submissions. Participants from the global South and under-represented communities are particularly encouraged to apply." Paper proposals are due to conference organizers by June 1, 2021. More conference specific information can be found (here); those wishing to contact conference organizers directly can send an email to: [email protected]

Finally, conference organizers have adopted an "optimistic" assumption and, at present, anticipate a traditional, "in-person" conference. They also note, however, that if "Covid-19 is till ruling our lives by November 2021," the conference workshop format will transform into a "hybrid-virtual."