Regression analysis and econometrics are common tools used by non-academics and academics alike. If you don't use tools like that, it's very hard to distinguish between chances and bias, as well as find out which factors are truly significant.
Yet they have no bearing on whether a lawsuit is valid. If the suit is valid, what in the world does economics have to do with it.
I've known doctors and small business owners. Their workday is frequently extremely long and stressful.
Here is the main difference:
Doctors and small business owners create positive economic output (more jobs, products, etc.).
Litigation results in less new products, less jobs, and less economic output. This has being found to be true across variety of industries.
I can see CEOs getting paid millions of dollars, but they unlike attorneys, create jobs.
Not only is that a pure opinion, its a ridiculous one at that. Last time I checked, doctors were in the business of treating patients. They themselves are the product. The don't create anything except (hopefully) healthier people.
As far litigation resulting in less jobs, this too has no basis in fact. I have no doubt that litigation has resulted in the firing of people and the ending of companies, but I also have no doubt that litigation has created new markets and new companies in response to changing law.
And as far as attorneys not creating jobs, I can't believe you said that. Attorneys have the ability to create jobs out of thin air. Ever heard of a private firm?
Again however, none of this has anything to do with the validity of lawsuits. Even if I were to take everything you just said as truth, that has no bearing on whether real legitimate lawsuits are being filed.
Nobel Prize in finance/economics science is far less political and more practical than Nobel Peace Prize. That's like saying Nobel Prize in medicine is in the same league as Nobel Peace Prize. For example, Markowitz's work is used in Wall St. today in managing probably very large amount of money.
And yet he's still an economist which has no bearing on the legal system.
Cost of tort and product litigation are one of many issues that have being studied in the area of finance and economic. Here's a sample paper:
http://papers.ssrn.com/sol3/papers.c...ract_id=226587
For example, if you get cross sectional data across wide variety of industry which includes product litigation information, you can create a mathematical model on effect of litigation on industry. Most probably, some techniques from econometric will be used.
Substantial number of people at Hoovers Institue and Cato Institute have economics background, and these people do write about tort reform. Dr. Thomas Sowell and Dr. Walter Williams are economists.
The field of public choice covers this area to some extent. I have being studying it for number of years.
Thats great. However its also largely irrelevant. If we carried your analysis over to the field of medicine, we would be deciding which procedures to perform solely based on cost. That means no more open heart surgery. This would be and is ridiculous. We don't make decisions solely based on cost, we make decisions based on importance. The same applies to the legal system.
So how does your credential compare to TILLINGHAST-TOWERS PERRIN whose data is used by business and academia alike?
So how does your credential compare to Milton Friedman (Nobel laureate for his work in monetary economics) or to Markowitz(Nobel laureate) since academic research is "not worth much"?
In the legal arena, my credentials are far more reputable than Mr. Freidman's. Namely because he has no credentials.
As far as tillinghast goes, if you give me 10 different consulting firms, I can show you 10 different forms of data. Your piece is so fraught with problems that it made me laugh out loud. The hypothetical situations you have given are also an impossibility. If you've been studying this stuff for years then you should know the basics of a class of a class action suit and how fee arrangements work. However from what you previously posted, you've shown you don't have the foggiest idea.
But lets put Mr. Friedman aside for a second. What exactly are your legal qualifications? Ever tried a case? Ever represented a client? Do you even have a law degree?
In Freedomnomics, John Lott who is an economist writes about law.
You don't have to be a lawyer to know that when a company is sued, why very often, that company's stock prices go down.
Nope, but that says nothing about why the company was sued. If a corp is caught dumping toxic waste and gets sued I guarantee you that their stock will go down. Are you suggesting that their shouldn'e be a lawsuit?
You don't have to be a lawyer to know that when a company spends large amount of money in legal costs, hiring goes down for everybody except the lawyers.
See above.
You don't have to be a lawyer to know that when funds allocated for new products are eliminated due to legal cost, that new products will not be coming because of cut-back.
So what. Show me where the law says that companies have a right to have funds for R&D. If you have a business and place products into the stream of commerce then you have assumed the risk of litigation. Thats life.
Again, as I illustrated above, looking at the economic side says nothing about the suit and its validity.
You don't have to be a lawyer to know that putting all those warnings and product safety features that may not be desired by everybody actually raises the cost of the product for everybody.
And in some cases it saves the consumer money because it protects a company from being sued, or al least prevents a judgment.
Again in all of this you are missing the point. I have issues with the legal system. We have grown too litigious in our society. That doesn't mean however that every lawsuit isn't valid and that the courts are the proper place for some disputes.
My point is that there won't be any solution reached by using the information in the piece in your original post because its mostly false. That hasn't changed and you haven't said anything to the contrary.
used data from TILLINGHAST-TOWERS PERRIN.
Data from TILLINGHAST-TOWERS PERRIN is widely used in business and academia alike. Even articles/papers from Wharton have used it.
TILLINGHAST-TOWERS PERRIN is a consulting firm which does data collection and analysis.
I like the Trial Lawyers, Inc. report because it's readable unlike research papers that I'm accustomed to reading.
And not only are they capable of being wrong, their data isn't applicable here. Looking solely at the economic effects of lawsuits doesn't have anything to with their validity.