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Accounting for censoring in duration data: An application to estimating the effect of legal reforms on the duration of medical malpractice disputes

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  • James Hughes
  • Elizabeth Savoca

Abstract

Using a sample of medical malpractice insurance claims closed between 1 October 1985 and 1 October 1989 in the USA, we estimate the impact of legal reforms on the longevity of disputes, via a competing risks model that accounts for length-biased sampling and a finite sampling horizon. We find that only the 'English rule'-a rule which requires the loser at trial to pay all legal expenses-shortens the duration of disputes. Our results for this law also show that failure to correct for length-biased sampling can incorrectly imply that the English rule lengthens the time needed for settlement and litigation. Our estimates also suggest that tort reforms that place additional procedural hurdles in the plaintiff s' paths tend to lengthen the time to disposition. Here, correction for a finite sampling horizon substantially changes the inferences with regard to the eff ect of this reform on duration.

Suggested Citation

  • James Hughes & Elizabeth Savoca, 1999. "Accounting for censoring in duration data: An application to estimating the effect of legal reforms on the duration of medical malpractice disputes," Journal of Applied Statistics, Taylor & Francis Journals, vol. 26(2), pages 219-228.
    • Handle: RePEc:taf:japsta:v:26:y:1999:i:2:p:219-228
    DOI: 10.1080/02664769922557
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    References listed on IDEAS

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    1. Hughes, James W & Snyder, Edward A, 1989. "Policy Analysis of Medical Malpractice Reforms: What Can We Learn from Claims Data?," Journal of Business & Economic Statistics, American Statistical Association, vol. 7(4), pages 423-431, October.
    2. Henry S. Farber & Michelle J. White, 1991. "Medical Malpractice: An Empirical Examination of the Litigation Process," RAND Journal of Economics, The RAND Corporation, vol. 22(2), pages 199-217, Summer.
    3. Heckman, James J. & Singer, Burton, 1986. "Econometric analysis of longitudinal data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 29, pages 1689-1763, Elsevier.
    4. Gary M. Fournier & Thomas W. Zuehlke, 1996. "The Timing of Out-of-Court Settlements," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 310-321, Summer.
    5. Hughes, James W., 1989. "The effect of medical malpractice reform laws on claim disposition," International Review of Law and Economics, Elsevier, vol. 9(1), pages 57-78, June.
    6. Snyder, Edward A & Hughes, James W, 1990. "The English Rule for Allocating Legal Costs: Evidence Confronts Theory," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 6(2), pages 345-380, Fall.
    7. Carter, Susan B. & Savoca, Elizabeth, 1990. "Labor Mobility and Lengthy Jobs in Nineteenth-Century America," The Journal of Economic History, Cambridge University Press, vol. 50(1), pages 1-16, March.
    8. Carter, Susan B. & Savoca, Elizabeth, 1991. "Gender differences in learning and earning in nineteenth-century America: The role of expected job and career attachment," Explorations in Economic History, Elsevier, vol. 28(3), pages 323-343, July.
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    1. Hughes, James W. & Savoca, Elizabeth, 1997. "Measuring the effect of legal reforms on the longevity of medical malpractice claims," International Review of Law and Economics, Elsevier, vol. 17(2), pages 261-273, June.
    2. Jacobo Uña-Álvarez, 2002. "Product-limit estimation for length-biased censored data," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 11(1), pages 109-125, June.
    3. Jacobo De UNA-ALvarez & M. Soledad Otero-GirALdez & Gema ALvarez-Llorente, 2003. "Estimation under length-bias and right-censoring: An application to unemployment duration analysis for married women," Journal of Applied Statistics, Taylor & Francis Journals, vol. 30(3), pages 283-291.

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