Courts, Congress and Public Policy, Part I: The FDA, the Courts and the Regulation of Tobacco

Abstract:     
We test the public policy impact of court decisions relative to Congress and the executive by examining the FDA's proposals to regulate tobacco products. To measure impact we utilize an event study methodology that measures how a court decision affects the returns of selected publicly traded firms. This approach allows us to sort out the decisiveness of court decisions that occur in the shadow of the executive and congressional power, as well as to sort out the power of judges within the judicial hierarchy. We find that courts, including District Courts, have the ability to affect significantly the expected profits of firms.

Number of Pages in PDF File: 43

Keywords: regulation, political economy, food and drug

JEL Classification: K00, K13, K23

working papers series