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Tort Reform and Accidental Deaths

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  • Paul H. Rubin
  • Joanna M. Shepherd

Abstract

Theory suggests that tort reform could have two possible impacts on accidents. Reforms could increase accidents as tortfeasors internalize less of the cost of externalities and have less incentive to reduce the risk of accidents. Alternatively, tort reforms could decrease accidents as lower expected liability costs result in lower prices, enabling consumers to buy more risk-reducing products such as medicines, safety equipment, and medical services, and could result in consumers increasing precautions to avoid accidents. We test these effects by examining the relationship between tort reform and non-motor-vehicle accidental death rates using panel data techniques. We find that noneconomic damage caps, a higher evidence standard for punitive damages, product liability reform, and prejudgment interest reform are associated with fewer accidental deaths, while reforms to the collateral source rule are associated with increased deaths. Overall, the tort reforms in the states between 1981 and 2000 are associated with an estimated 24,000 fewer accidental deaths.

Suggested Citation

  • 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.
  • Handle: RePEc:ucp:jlawec:v:50:y:2007:p:221-238 DOI: 10.1086/521738
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    References listed on IDEAS

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    1. George L. Priest, 1991. "The Modern Expansion of Tort Liability: Its Sources, Its Effects, and Its Reform," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 31-50, Summer.
    2. Manning, Richard L, 1994. "Changing Rules in Tort Law and the Market for Childhood Vaccines," Journal of Law and Economics, University of Chicago Press, vol. 37(1), pages 247-275, April.
    3. Calfee, John E & Rubin, Paul H, 1992. "Some Implications of Damage Payments for Nonpecuniary Losses," The Journal of Legal Studies, University of Chicago Press, vol. 21(2), pages 371-411, June.
    4. W. Kip Viscusi & Patricia H. Born, 2005. "Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 72(1), pages 23-43.
    5. Cohen, Alma & Dehejia, Rajeev, 2004. "The Effect of Automobile Insurance and Accident Liability Laws on Traffic Fatalities," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 357-393, October.
    6. Viscusi, W. Kip & Zeckhauser, Richard J. & Born, Patricia & Blackmon, Glenn, 1993. "The Effect of 1980s Tort Reform Legislation on General Liability and Medical Malpractice Insurance," Journal of Risk and Uncertainty, Springer, vol. 6(2), pages 165-186, April.
    7. Browne, Mark J & Puelz, Robert, 1999. "The Effect of Legal Rules on the Value of Economic and Non-economic Damages and the Decision to File," Journal of Risk and Uncertainty, Springer, vol. 18(2), pages 189-213, August.
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    Citations

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    Cited by:

    1. Mark A. Geistfeld, 2009. "Products Liability," Chapters,in: Tort Law and Economics, chapter 11 Edward Elgar Publishing.
    2. Eric A. Helland & Alexander Tabarrok, 2012. "Product Liability and Moral Hazard: Evidence from General Aviation," Journal of Law and Economics, University of Chicago Press, vol. 55(3), pages 593-630.
    3. Eric Helland & Anupam B. Jena & Dan P. Ly & Seth A. Seabury, 2016. "Self-insuring against Liability Risk: Evidence from Physician Home Values in States with Unlimited Homestead Exemptions," NBER Working Papers 22031, National Bureau of Economic Research, Inc.
    4. Florian Baumann & Klaus Heine, 2013. "Innovation, Tort Law, and Competition," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 169(4), pages 703-719, December.
    5. Paul H. Rubin, 2014. "Pathological Altruism and Pathological Regulation," Cato Journal, Cato Journal, Cato Institute, vol. 34(1), pages 171-183, Winter.
    6. Lakdawalla, Darius N. & Seabury, Seth A., 2012. "The welfare effects of medical malpractice liability," International Review of Law and Economics, Elsevier, vol. 32(4), pages 356-369.
    7. Daniel Carvell & Janet Currie & W. Bentley MacLeod, 2012. "Accidental death and the rule of joint and several liability," RAND Journal of Economics, RAND Corporation, vol. 43(1), pages 51-77, March.
    8. 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.
    9. Dementyeva, Maria & Koster, Paul R. & Verhoef, Erik T., 2015. "Regulation of road accident externalities when insurance companies have market power," Journal of Urban Economics, Elsevier, vol. 86(C), pages 1-8.
    10. Toshiaki Iizuka, 2013. "Does Higher Malpractice Pressure Deter Medical Errors?," Journal of Law and Economics, University of Chicago Press, vol. 56(1), pages 161-188.
    11. Jonathan Klick & Thomas Stratmann, 2007. "Medical Malpractice Reform and Physicians in High-Risk Specialties," The Journal of Legal Studies, University of Chicago Press, vol. 36(S2), pages 121-142, June.
    12. Ulrich Matter & Alois Stutzer, 2015. "Politico-Economic Determinants of Tort Reforms in Medical Malpractice," Working papers 2015/02, Faculty of Business and Economics - University of Basel.
    13. Anca Cotet, 2009. "Tort Reform and the Demand for Medical Care: Evidence from State-by-State Variation in Non-Economic Damages Caps," Working Papers 200901, Ball State University, Department of Economics, revised Mar 2010.
    14. repec:bla:jrinsu:v:84:y:2017:i:2:p:691-715 is not listed on IDEAS
    15. Gomez, Fernando & Penalva, Jose, 2015. "Tort reform and the theory of coordinating tort and insurance," International Review of Law and Economics, Elsevier, vol. 43(C), pages 83-97.
    16. Zhou, J., 2010. "Access to justice : An economic approach," Other publications TiSEM 9d70f451-35c4-4878-92bf-7, Tilburg University, School of Economics and Management.
    17. Cotet-Grecu, Anca, 2015. "The impact of non-economic damages caps on obstetrics: Incentives versus practice style," Economics & Human Biology, Elsevier, vol. 17(C), pages 29-41.
    18. 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.

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