Research

WORKING PAPERS

Quantifying Economic Reasoning in Court: Judge Economic Sophistication and Pro-business Orientation (link)

Abstract: Economics' utility for policymaking is evident and has been increasingly relied upon. However, it remains uncertain whether judges embrace economic arguments in court cases. By applying computational linguistics tools to the analysis of U.S. federal district courts’ decisions from 1932 to 2016, this paper quantifies the rise of economic reasoning in court cases that range from securities regulation to antitrust law. I then relate judges’ level of economic reasoning to their training. I find that significant judge heterogeneity in economics sophistication can be explained by attendance at law schools that have a large presence of the law and economics faculty. Finally, for all regulatory cases from 1970 to 2016, I hand code whether the judge ruled in favor of the business or the government. I find that judge economics sophistication is positively correlated with a higher frequency of pro-business decisions, even after controlling for political ideology and a rich set of other judge covariates. Overall, these findings highlight how economic reasoning is being adopted in different fields of legal adjudication and its implications for judicial decision-making, shedding new light on the interplay between economics and law.

Entry Regulation and Firm Dynamics: Evidence from the Certificate-of-Need Law in US Health Industry

Abstract: Certificate-of-need laws have been recognized as an important barrier to entry to health care providers. Using a panel dataset and difference-in-difference research design exploiting variation across states over time, I systematically test the direct effect of CON regulation on firm entry rate of hospital,  home health agency, ambulatory surgical center, and ICF/MR, which are major types of health care providers. I then examine the self-employment of independent practice physicians who are negatively affected by the regulation according to anecdotal evidence. The political economy side of the story suggests that small potential entrants tend to be burdened more than the big ones due to compliance cost incurred in the application process. I assess this claim by looking at whether the regulation increases entering firm size distribution. I find a significant effect on hospital entry, but not on the other types of providers. 

RESEARCH WORK IN PROGRESS

Fixing Patent Notice: The Impact of Regulation and Litigation on Innovation