IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v31y2013i1p110-125.html
   My bibliography  Save this article

The Determinants Of State-Level Caps On Punitive Damages: Theory And Evidence

Author

Listed:
  • THOMAS J. MICELI
  • MICHAEL P. STONE

Abstract

Under the standard economic model of torts, punitive damages correct for imperfect detection. Incorporating litigation costs into the model provides a justification for punitive damage caps. At the optimum, caps balance deterrence against the cost of litigation. Empirical testing of the model is performed via Cox proportional and parametric hazard analyses, using a panel dataset from 1981 to 2007. The results reveal a positive relationship between judicial and legal expenditures (a proxy for legal costs) and cap enactment, and a negative relationship between state GSP (a proxy for damages) and cap enactment. Cap enactment is also influenced by political ideology.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Thomas J. Miceli & Michael P. Stone, 2013. "The Determinants Of State-Level Caps On Punitive Damages: Theory And Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 31(1), pages 110-125, January.
  • Handle: RePEc:bla:coecpo:v:31:y:2013:i:1:p:110-125
    DOI: j.1465-7287.2011.00297.x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1465-7287.2011.00297.x
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paul H. Rubin & Joanna M. Shepherd, 2007. "Tort Reform and Accidental Deaths," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 221-238.
    2. Danzon, Patricia, 1984. "The Frequency and Severity of Medical Malpractice Claims," Journal of Law and Economics, University of Chicago Press, vol. 27(1), pages 115-148, April.
    3. Anupam Nanda, 2008. "Property Condition Disclosure Law: Why Did States Mandate ‘Seller Tell All’?," The Journal of Real Estate Finance and Economics, Springer, vol. 37(2), pages 131-146, August.
    4. Eisenberg, Theodore, et al, 1997. "The Predictability of Punitive Damages," The Journal of Legal Studies, University of Chicago Press, vol. 26(2), pages 623-661, June.
    5. Joni Hersch & W. Kip Viscusi, 2004. "Punitive Damages: How Judges and Juries Perform," The Journal of Legal Studies, University of Chicago Press, vol. 33(1), pages 1-36, January.
    6. Martin F. Grace & J. Tyler Leverty, 2013. "How Tort Reform Affects Insurance Markets," Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(6), pages 1253-1278, December.
    7. Karpoff, Jonathan M & Lott, John R, Jr, 1999. "On the Determinants and Importance of Punitive Damage Awards," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 527-573, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matter, Ulrich & Stutzer, Alois, 2014. "The Role of Lawyer-Legislators in Shaping the Law: Evidence from Voting Behavior on Tort Reforms," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100452, Verein für Socialpolitik / German Economic Association.
    2. Matter, Ulrich & Stutzer, Alois, 2015. "Politico-economic determinants of tort reforms in medical malpractice," Working papers 2015/02, Faculty of Business and Economics - University of Basel.
    3. Matter, Ulrich & Stutzer, Alois, 2016. "The role of party politics in medical malpractice tort reforms," European Journal of Political Economy, Elsevier, vol. 42(C), pages 17-35.
    4. Matter, Ulrich & Stutzer, Alois, 2013. "Do Lawyer-Legislators Protect Their Business? Evidence from Voting Behavior on Tort Reforms," Working papers 2013/09, Faculty of Business and Economics - University of Basel.

    More about this item

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:coecpo:v:31:y:2013:i:1:p:110-125. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/weaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.