New Economics Papers
on Law and Economics
Issue of 2005‒01‒09
four papers chosen by
Jeong-Joon Lee, Towson University

  1. Casinos, Crime, and Community Costs By Earl L. Grinols; David B. Mustard
  2. Punitive Damages and the Processing of Tort Claims By Thomas A. Eaton; David B. Mustard; Susette M. Talarico
  3. The Economics of Human Rights By Lorenz Blume; Stefan Voigt
  4. Improving Credibility by Delegating Judicial Competence - the Case of the Judicial Committee of the Privy Council By Stefan Voigt; Michael Ebeling; Lorenz Blume

  1. By: Earl L. Grinols (University of Illinois); David B. Mustard (University of Georgia)
    Abstract: We examine the relationship between casinos and crime using county-level data for the US between 1977 and 1996. Casinos were non-existent outside Nevada before 1978, and expanded to many other states during our sample period. Most factors that reduce crime occur before or shortly after a casino opens, while those that increase crime, including problem and pathological gambling, occur over time. The results suggest that the effect on crime is low shortly after a casino opens, and grows over time. Roughly 8 percent of crime in casino counties in 1996 was attributable to casinos, costing the average adult $75 per adult per year.
    Keywords: Crime, Casinos, Social Costs, Problem and Pathological Gambling
    JEL: K
    Date: 2005–01–05
  2. By: Thomas A. Eaton (University of Georgia); David B. Mustard (University of Georgia); Susette M. Talarico (University of Georgia)
    Abstract: Punitive damages are one of the most controversial aspects of tort litigation and have been the subject of various theoretical, empirical, and experimental studies. One criticism of punitive damages refers to the effect that they have on civil litigation processes. In particular, Polinsky (1997) argues that the uncertainty and unpredictability that punitive damage claims inject into a case may increase both the rate and amount of settlements, thus implying that punitive damages carry systemic consequences for the general processing of tort claims. This paper represents the first, empirical examination of this implication. With one of the largest and most comprehensive data sets of tort litigation (over 25,000 cases filed from 1994 through 1997 in several counties in Georgia), we examine the effect of the decision to seek punitive damages on several major decision points in the tort litigation process in a series of logit regression models. With extensive control variables for type of case, the presence or absence of caps on damages, and other potentially important variables, we find that seeking punitive damages has no statistically significant effect on most phases of the tort litigation process.
    Keywords: Torts, Litigation, Punitive Damages, Settlement Rates
    JEL: K
    Date: 2005–01–05
  3. By: Lorenz Blume (Department of Economics, University of Kassel); Stefan Voigt (Department of Economics, University of Kassel and ICER, Torino)
    Abstract: Economists are often skeptical concerning the economic effects of various forms of human rights: it has been argued that basic human rights can make the legal system less efficient but also that extensive social rights are incompatible with market economies. It is argued here that basic human rights are a precondition for other kinds of rights such as property and civil rights and that they are thus efficiency-enhancing. Four different groups of rights are identified. It is asked what effects they have on welfare and growth. The transmission channels through which the different rights affect welfare and growth are identified by estimating their effects on investment in both physical and human capital and overall productivity. Basic human rights have indeed a positive effect on investment, but do not seem to contribute to productivity. Social or emancipatory rights, in turn, are not conducive to investment in physical capital but do contribute to productivity improvements. None of the four groups of rights ever has a significant negative effect on any of the economic variables here included.
    JEL: H41 H73 K10 O11 O57 P14 P51
    Date: 2004–12
  4. By: Stefan Voigt (Department of Economics, University of Kassel and ICER, Torino); Michael Ebeling (Department of Economics, University of Kassel); Lorenz Blume (Department of Economics, University of Kassel)
    Abstract: It is argued that government credibility is an important resource and that it can be improved by delegating decision-making competence beyond the nation-state. It is hypothesized that such delegation should result in higher income and growth. Some former British colonies retained the Judicial Committee of the Privy Council as their final court of appeals even after independence. This court is thus taken as a natural experiment to test our hypothesis. It turns out that retaining the jurisdiction is indeed significant for explaining economic growth.
    Keywords: Credibility, Delegation of Competence, Judicial Independence, Economic History, Judicial Committee of the Privy Council
    JEL: H11 K11 K41 N40 O57 P51
    Date: 2004–12

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