The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform

47 Pages Posted: 4 Feb 2019 Last revised: 15 Mar 2022

Date Written: November 30, 2021


Appendix is available at:

We examine whether caps on noneconomic damages in medical malpractice cases affect in-hospital patient safety. We use Patient Safety Indicators (PSIs) – measures of adverse events – as proxies for safety. In difference-in-differences (DiD) analyses of five states that adopt caps during 2003–2005, we find that multiple measures of non-fatal adverse patient safety events worsen after cap adoption, relative to control states. DiD inference can be unreliable with a small number of treated units. We therefore also develop a randomization inference-based test for inference with few treated units but multiple, potentially correlated outcomes, and confirm the robustness of our results with this nonparametric approach. We also provide evidence that the decline in patient safety is unlikely to be driven by patient selection.

Keywords: medical malpractice, torts, healthcare quality, patient safety

JEL Classification: I13, I18, K13

Suggested Citation

Zabinski, Zenon and Black, Bernard S., The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform (November 30, 2021). Northwestern Law & Econ Research Paper No. 13-09, Available at SSRN: or

Zenon Zabinski

Bates White ( email )

1300 I Street NW
Washington, DC 20005
United States

Bernard S. Black (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States
312-503-2784 (Phone)

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