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Courts, Congress and Public Policy, Part I: The FDA, the Courts and the Regulation of Tobacco

43 Pages Posted: 8 Apr 2006  

Mathew D. McCubbins

Department of Political Science and Law School, Duke University

Jeffrey R. Lax

Columbia University - Department of Political Science

Date Written: April 7, 2006

Abstract

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

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

Mathew D. McCubbins (Contact Author)

Department of Political Science and Law School, Duke University ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Jeffrey R. Lax

Columbia University - Department of Political Science ( email )

MC3320
420 West 118th Street
New York, NY 10027
United States

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