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Tort Reform and Accidental Deaths

18 Pages Posted: 11 Aug 2005 Last revised: 30 May 2012

Paul H. Rubin

Emory University - Department of Economics

Joanna Shepherd

Emory University School of Law

Date Written: May 1, 2007

Abstract

Theory suggests that tort reform could have two possible impacts on accidents. Reforms could increase accidents as tortfeasors internalize less of the cost of externalities and have less incentive to reduce the risk of accidents. Alternatively, tort reforms could decrease accidents as lower expected liability costs result in lower prices, enabling consumers to buy more risk-reducing products such as medicines, safety equipment, and medical services, and could result in consumers increasing precautions to avoid accidents. We test these effects by examining the relationship between tort reform and non-motor-vehicle accidental death rates using panel data techniques. We find that noneconomic damage caps, a higher evidence standard for punitive damages, product liability reform, and prejudgment interest reform are associated with fewer accidental deaths, while reforms to the collateral source rule are associated with increased deaths. Overall, the tort reforms in the states between 1981 and 2000 are associated with an estimated 24,000 fewer accidental deaths.

Keywords: tort reform, accidents, deaths

JEL Classification: I12, K14

Suggested Citation

Rubin, Paul H. and Shepherd, Joanna, Tort Reform and Accidental Deaths (May 1, 2007). Journal of Law and Economics, Vol. 50, 2007. Available at SSRN: https://ssrn.com/abstract=781424

Paul Rubin (Contact Author)

Emory University - Department of Economics ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States
404-931-0493 (Phone)
630-604-9609 (Fax)

HOME PAGE: http://www.economics.emory.edu/Rubi.htm

Joanna Shepherd

Emory University School of Law ( email )

1301 Clifton Road
Atlanta, GA 30322
United States
404-727-8957 (Phone)

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