Empirical Legal Studies

Transforming "Vertical" Regression Output Into a "Horizontal" Table Format

A recent Statalist discussion (here) walks readers through the coding necessary to transform the following (traditionally "vertical") regression output:

-----------------------------------------
                               mpg       
-----------------------------------------
Weight (lbs.)                      -0.006
                       [-0.009    -0.003]
                                     0.00
Displacement (cu. in.)              0.006
                       [-0.014     0.025]
                                     0.57
Turn circle (ft.)                  -0.139
                       [-0.496     0.219]
                                     0.44
Intercept                          43.588
                       [33.688    53.489]
                                     0.00
Number of observations                 74
-----------------------------------------

into a "horizontal" output format:

-------------------------------------------------------------
                       Coefficient       95% CI       p-value
-------------------------------------------------------------
Weight (lbs.)               -0.006 [-0.009    -0.003]    0.00
Displacement (cu. in.)       0.006 [-0.014     0.025]    0.57
Turn circle (ft.)           -0.139 [-0.496     0.219]    0.44
Intercept                   43.588 [33.688    53.489]    0.00
-------------------------------------------------------------

Anticipated and Unanticipated Costs and Benefits of Mandatory Insider Trading "Blackout" Requirements--Evidence From the EU

Many countries, including the U.S., impose closed periods (a.k.a. "blackouts") on corporate insider trading for a period of time preceding earnings announcements. Such regulations on insiders' trading activity are typically justified due to insiders' unique role and position in capital markets. Whether these regulations achieve their stated goals remains relatively understudied.

In July 2016, all E.U.-listed firms were required to impose a 30-day blackout period on corporate insider trading prior to interim or fiscal year-end earnings announcements. The variation across firms prior to the July 2016 rule created a quasi-natural experiment to assess the new (2016) rule's impact on "insider trading activity, profitability, and market consequences."

In The Impact of Mandatory Closed Periods on Corporate Insider Trading, Francois Brochet (BU—Accounting) et al. report results from a difference-in-differences strategy that compares 30 compare countries that adopted mandated closed periods after July 2016 (treatment group) with companies that already had such policies (control group) in place prior to 2016. Notably, what the authors report is that their results highlight that uniform closed periods "deter informed trading but may unintentionally harm market liquidity and information quality." The abstract follows.

"The Market Abuse Regulation (MAR), implemented in July 2016 across the EU, mandates uniform closed periods, prohibiting insider trading 30 days before earnings announcements. We find a significant reduction in insider trading during these periods in treated countries without prior mandates. Although some trades still occur, they do not appear to be driven by private information. However, treated insiders experience an increase in compensation. Furthermore, information asymmetry rises before earnings announcements, and treated firms experience a decline in institutional ownership. Overall, the study suggests that mandated closed periods do not lead to a wealth transfer from insiders to outsiders, nor do they enhance the information environment. These results underscore the limitations of regulatory one-size-fits-all measures in curbing corporate insider trading."

Empirical Evidence, Courts, and the 4th Amendment

Over time, and since Katz (1954), Justice Harlan's two-part approach has largely guided how courts construe privacy protections in the 4th Amendment context. As the second part of Harlan's approach involves what many consider to be amenable to empirical social science, a growing body of scholarship sets out to mark the boundaries of where, as Christine Scott-Hayward (CSU-Long Beach--criminology) et al., note, "society [reasonably] expects privacy." Increasingly, defense attorneys increasing turn to such research findings in their briefs and pleadings to courts.

While entirely descriptive, The Role of Empirical Scholarship in Fourth Amendment Privacy Jurisprudence levers 13 leading empirical papers in the 4th Amendment space and then identifies and dives deeply into the relatively (and absolutely) small number of judicial opinions that cite to the leading empirical work. The authors' main takeaway is one of frustration with the courts' reluctance to engage with empirical legal scholarship relevant to the question of societal expectations of privacy in the search and seizure context. (To be sure, any judicial reluctance to engage with empirical legal research is merely a sub-set of, for better or worse, courts' collective benign neglect of legal scholarship generally.)

In the end, the paper's findings (and the authors' frustration) both bump into and provide indirect support for a larger point that my Cornell colleague (and friend) Jeff Rachlinski described years ago (2011): “Empirical legal scholarship . . . is not the same as evidence-based law. Empirical legal scholarship resides primarily in the academy.” That relevant empirical legal scholarship will migrate from the academy and into judicial opinions is not a given. Moreover, any such migration will likely continue to vary across legal doctrines and case types.