New Economics Papers
on Law and Economics
Issue of 2010‒09‒25
nine papers chosen by
Jeong-Joon Lee, Towson University

  1. Jury Discrimination in Criminal Trials By Patrick Bayer; Randi Hjalmarsson; Shamena Anwar
  2. Crime as tourism externality By Bianca Biagi; Claudio Detotto
  3. Counting the cost of crime in Italy By Claudio Detotto; Marco Vannini
  4. The impact of natural disasters on crime By Susmita Roy
  5. On Legal Cooperation and the Dynamics of Legal Convergence By Bertrand Crettez; Bruno Deffains; Olivier Musy
  6. Constitutionalism beyond the state: myth or necessity? By Jean L. Cohen
  7. Bankruptcy and Product-Market Competition: Evidence from the Airline Industry By Ciliberto, Federico; Schenone, Carola
  8. Voluntary pollution abatement and regulation in the presence of a green market By Michael , Delgado; Neha , Khanna
  9. Are the Bankrupt Skies the Friendliest? By Ciliberto, Federico; Schenone, Carola

  1. By: Patrick Bayer; Randi Hjalmarsson; Shamena Anwar
    Abstract: This paper examines the impact of jury racial composition on trial outcomes using a unique dataset of all felony trials in Sarasota County, Florida between 2004 and 009. We utilize a research design that exploits day-to-day variation in the composition of the jury pool to isolate quasi-random variation in the composition of the seated jury. We find strong evidence that all-white juries acquit whites more often and are less favorable to black versus white defendants when compared to juries with at least one black member. Using the Anwar-Fang rank order test, we find strong statistical evidence of discrimination on the basis of defendant race. These results are consistent with racial prejudice on the part of white jurors, black jurors, or both. Using a simple model of jury selection and decision-making, we replicate the entire set of empirical regularities observed in the data, including the fact that blacks in the jury pool are just as likely as whites to be seated. Simulations of the model suggest that jurors of each race are heterogeneous in the standards of evidence that they require to convict and that both black and white defendants would prefer to face jurors of the same race.
    Date: 2010
  2. By: Bianca Biagi; Claudio Detotto
    Abstract: This paper analyses the linkage between tourism and crime with particular focus on the distortions generated onto criminal activities by the presence of visitors. Controlling for socio-demographic and economic variables, we empirically investigate the contribution of tourist arrivals to different types of crimes for 103 Italian provinces and for the year 2005. Possible spill-over effects of crime are taken into account by testing two spatial models (one spatial lag model and one spatial error model). We also test the hypothesis according to which the different geography of tourist destinations - i.e. urban, mountain, marine etc- alters the impact of tourism on crime. Finally, we measure the social cost of crime associated with tourist arrivals.
    Keywords: Crime; tourism; spill-over effect; negative externality
    JEL: K0 R0 L83
    Date: 2010
  3. By: Claudio Detotto; Marco Vannini
    Abstract: The aim of this paper is to gauge the cost of crime in Italy by concentrating on a subset of offences covering about 64% of total recorded crime in year 2006. Following the breakdown of costs put forward by Brand and Price, we focus on the costs in anticipation, as a consequence and in response to a specific offence. The estimated total social cost is more than € 38 billion, which amounts to about 2.6% of Italy’s GDP. To show the usefulness of these measures, we borrow the elasticity estimates from recent studies concerning the determinants of crime in Italy and calculate the cost associated with the surge in crime fuelled by unemployment and pardons. Indeed, in both cases such costs are substantial, implying that they should no longer be skipped when assessing the relative desirability of public policies towards crime.
    Keywords: Cost of crime; Cost–Benefit Analysis; Investments in public security
    JEL: D61 H50 K00
    Date: 2010
  4. By: Susmita Roy (University of Canterbury)
    Abstract: This study addresses the following questions in the context of a developing coun- try. Do crimes increase following natural disasters? Does an upcoming election or the presence of a strong local media, which potentially increases the incentive of the gov- ernment to provide disaster relief, mitigate the eect of disasters on crime rates? I nd that crime rates tend to increase following moderate to big disasters. Furthermore, a higher pre-disaster growth of newspapers has a mitigating eect on the crime response to disasters. Elections also in uence the crime response to disasters. Crimes are more likely to rise following disasters in the years that are close to an election year.
    Keywords: crime rate; natural disaster; role of media and elections; developing country
    JEL: Q54 K42
    Date: 2010–09–14
  5. By: Bertrand Crettez; Bruno Deffains; Olivier Musy
    Abstract: In this paper, we study the dynamics of legal convergence and the comparison between the different instruments of legal convergence based on cooperative strategies (i.e., harmonization and unification) or not. To study these questions we use a model with two nation-states which is inspired in part by that used in Carbonara and Parisi (2008) where preferences of each nation-state are such that it is costly to change the law, but it is also costly to have a different legal system from the other nation-state. We show that legal unification could be achieved in the long-run through small step by step changes despite the existence of huge harmonization costs in the short run. We also show that legal cooperation is not always necessary to achieve legal convergence.
    Keywords: Law-and-Economics, Legal Convergence, Legal harmonization, Legal Uniformization
    JEL: C72 K00
    Date: 2010
  6. By: Jean L. Cohen
    Abstract: Constitutionalism beyond the state is a deeply contested project. The emergence of global governance and global laws that directly affect individuals and regulate the conduct of states toward their own citizens raise questions about the basic hierarchy of authority among states, regional bodies and global institutions. States no longer have a monopoly of the production of international or global law. Thus questions about the legitimacy of global law and governance arise particularly, but not only, when they have constitutionalism- and democracy eviscerating effects. The discourse of global constitutionalism as a possible characterization of or response to the expanded juridification and exercise of coercive public power on the supra state level follows from these developments. But what kind of constitutionalism is appropriate beyond the state and what should be the relation among distinct and at times competing legal orders? This article addresses these questions focusing on the global political system and using the lens of the recent ECJ decision in the Kadi case to formulate the appropriate conceptual issues. I argue for a constitutional pluralist approach but I also argue that this requires reform of the global political system. I claim that a human rights-oriented constitutionalism is compatible with state sovereignty, appropriately understood. We should drop unhelpful dichotomous frameworks such as cosmopolitanism versus sovereignty, monism versus dualism and think creatively with respect to changing sovereignty regimes, federal unions of states that are not themselves states but which are constitutional and potentially constitutionalist legal orders. In this way we can try to preserve the best of what the older sovereignty regime of international law had to offer – constitutionalism, democracy, self determination of states, sovereign equality – while conceptualizing and (re-)designing the new, especially in light of international human rights concerns, in ways compatible with these and other, individual-oriented normative principles.
    Keywords: constitutional change; democracy; governance; law; legitimacy; pluralism
    Date: 2010–09–15
  7. By: Ciliberto, Federico; Schenone, Carola
    Abstract: We investigate the effects of Chapter 11 bankruptcy filings on product market competition using data from the US airline industry. We find that bankrupt airlines permanently downsize their national route structure, their airport-specific networks, and their route-specific flight frequency and capacity. We also find that bankrupt airlines lower their route-specific prices while under bankruptcy protection, and increase them after emerging. We do not find robust evidence of significant changes by the bankrupt airline's competitors along any of the dimensions above. Overall, our results are consistent with the hypothesis that bankruptcy is the result of a war of attrition over capacity and network cutbacks.
    Keywords: Airline Industry; Bankruptcy; Product Market Competition; Chapter 11; War of Attrition; Capacity Reduction
    JEL: K2 G3 L1
    Date: 2010–08–12
  8. By: Michael , Delgado; Neha , Khanna
    Abstract: We present a model in which firms voluntarily abate emissions in a market that values environmental quality such that firms can charge a premium for goods that are environmentally friendly. Our results establish conditions under which mandatory abatement crowds out voluntary abatement, or, alternatively, provides an incentive for firms to increase their level of voluntary abatement in order to maintain product differentiation. In addition, we identify cases under which firms that do not abate voluntarily would support mandatory abatement if they are able to collectively pass off (at least part of) the costs of abatement to consumers. Our model predicts that regulatory policies that ignore voluntary abatement are likely to over-regulate non-abating firms compared to the level of regulation that accounts for voluntary abatement if consumer income levels in the green market are relatively high. If consumer income levels in the green market are relatively low, regulation may be ineffective in improving overall environmental quality.
    Keywords: Voluntary Pollution Abatement; Regulation; Markup
    JEL: K32 Q52 Q58
    Date: 2010–07–29
  9. By: Ciliberto, Federico; Schenone, Carola
    Abstract: We use data from the US airline industry to investigate whether firms that are under bankruptcy protection, as well as these firms' product market rivals, change the quality of the products they offer. We measure the quality of the services offered by a carrier using flight cancellations and delays, and the age of the aircraft used by the carrier. We find that delays and cancelations are less frequent during bankruptcy filings but return to their pre-bankruptcy levels once the bankrupt firm emerges from bankruptcy. We also find that firms use Chapter 11 filings to permanently reduce the age of their fleet. We do not find evidence of statistically and economically significant changes by the airline's competitors along any of the dimensions above.
    Keywords: Bankruptcy; Chapter 11; Product Market Quality; Airline Industry
    JEL: K2 G3 L1
    Date: 2010–08–12

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