43 Pages Posted: 8 Apr 2006
Date Written: April 7, 2006
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.
Keywords: regulation, political economy, food and drug
JEL Classification: K00, K13, K23
Suggested Citation: Suggested Citation
McCubbins, Mathew D. and Lax, Jeffrey R., Courts, Congress and Public Policy, Part I: The FDA, the Courts and the Regulation of Tobacco (April 7, 2006). San Diego Legal Studies Paper No. 07-42. Available at SSRN: https://ssrn.com/abstract=895721 or http://dx.doi.org/10.2139/ssrn.895721