Advocatus, Et Non Latro? Testing the Supplier-Induced-Demand Hypothesis for Italian Courts of Justice

35 Pages Posted: 8 Jun 2010

See all articles by Paolo Buonanno

Paolo Buonanno

University of Bergamo

Matteo Maria Galizzi

University of Brescia - Department of Economics; University of London - School of Economics and Finance

Date Written: June 7, 2010

Abstract

We explore the relationship between litigation rates and the number of lawyers, in a typical supplier-induced demand (SID) frame. Drawing on an original panel dataset for the 169 Italian courts of justice between 2000 and 2007, we first document that the number of lawyers is positively correlated with different measures of litigation rate. Then, using an instrumental variables strategy we find that a 10 percent increase of lawyers over population is associated with an increase between 1.6 to 6 percent in civil litigation rates. Thus, our empirical analysis supports the SID hypothesis for the Italian lawyers: following an increase in their relative number, lawyers may exploit their informational advantage to induce clients to access to courts even when litigation is unnecessary or ineffective.

Keywords: Lawyers, Litigiosity, Causality

JEL Classification: F22, J15, K42, R1

Suggested Citation

Buonanno, Paolo and Galizzi, Matteo Maria, Advocatus, Et Non Latro? Testing the Supplier-Induced-Demand Hypothesis for Italian Courts of Justice (June 7, 2010). FEEM Working Paper No. 52.2010, Available at SSRN: https://ssrn.com/abstract=1621551 or http://dx.doi.org/10.2139/ssrn.1621551

Matteo Maria Galizzi

University of Brescia - Department of Economics ( email )

Via San Faustino 74B
Brescia, 25122
Italy

University of London - School of Economics and Finance ( email )

Mile End Road
London, E1 4NS
United Kingdom

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