Using the Statistical Concept of “Severity” to Assess Seemingly Contradictory Statistical Evidence (with a Particular Application to Damage Estimation)

Abstract

When parties present divergent econometric evidence, the court may view such evidence as contradictory and thus ignore it completely, without conducting closer analysis. We develop a simple method for distinguishing between actual and merely apparent contradiction based on the statistical concept of the “severity” of the furnished evidence. Again using “severity”, we also propose a method for reconciling divergent findings in instances of mere seeming contradiction. Our chosen application is that of damage estimation in follow-on cases.

Keywords: Cartel damages, severity, statistical testing