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289 records from EconBiz based on author Name
1. Property Tax Limitations and Mobility : The Lock-In Effect of California's Proposition 13
abstractProposition 13, adopted by California voters in 1978, mandates a property tax rate of one percent, requires that properties be assessed at market value at the time of sale, and allows assessments to rise by no more than 2% per year until the next sale. In this paper, we examine how Prop 13 has affected the average tenure length of owners and renters in California versus in other states. We find that from 1970 to 2000, the average tenure length of owners and renters in California increased by 1.04 years and .79 years, respectively, relative to the comparison states. We also find substantial variation in the response to Prop 13, with African-American households responding more than households of other races and migrants responding more than native-born households. Among owner-occupiers, the response to Prop 13 increases sharply as the size of the subsidy rises. Homeowners living in inland California cities such as Bakersfield receive Prop 13 subsidies averaging only $110/year and their average tenure length increased by only .11 years in 2000, but owners living in coastal California cities receive Prop 13 subsidies averaging in the thousands of dollars and their average tenure length increased by 2 to 3 years
Nada Wasi; White, Michelle J.;2022
Availability: Link
2. Personal Bankruptcy and the Level of Entrepreneurial Activity
abstractThe U.S. personal bankruptcy system functions as a bankruptcy system for small businesses as well as consumers, because debts of non-corporate firms are personal liabilities of the firms' owners. If the firm fails, the owner has an incentive to file for bankruptcy, since both business debts and the owner's personal debts will be discharged. In bankruptcy, the owner must give up assets above a fixed exemption level. Because exemption levels are set by the states, they vary widely. We show that higher bankruptcy exemption levels benefit potential entrepreneurs who are risk averse by providing partial wealth insurance and therefore the probability of owning a business increases as the exemption level rises. We test this prediction and find that the probability of households owning businesses is 35% higher if they live in states with unlimited rather than low exemptions. We also find that the probability of starting a business and the probability of owning a corporate rather than non-corporate business are higher for households that live in high exemption states
Fan, Wei; White, Michelle J.;2022
Availability: Link
3. A Comparison of Formal and Informal Dispute Resolution in Medical Malpractice
abstractIn this study we examine the experience of a single large hospital with an informal pre-litigation "complaint" process that resolves some cases outside of the legal system. The empirical results are generally consistent with an information structure where patients are poorly informed about the quality of medical care and the hospital does not know whether particular patients are litigious or not. The complaint process seems to resolve many complaints in a less costly manner than filing lawsuits. Almost half of all complaints are resolved before a lawsuit is filed. The large majority of these are dropped, and they are cases that would likely have been dropped even if they had been initiated as lawsuits. Very few cases are settled with a cash payment to patients before a lawsuit is filed, suggesting that patients must file lawsuits in order to convince the hospital that they are litigious enough to justify a settlement. Cases initiated through the complaint process are not resolved (dropped, settled, tried to a verdict) significantly differently from cases initiated as lawsuits, controlling for observable case characteristics. When settlements of lawsuits occur, the amounts paid do not vary depending on how the case originated, but settlements of complaints are much higher for cases settled after a lawsuit is filed, We conclude that the complaint process is a cost-effective "front-end" for the litigation process that provides information to patients regarding the quality of their medical care and, hence, the likelihood of negligence
Farber, Henry S.; White, Michelle J.;2021
Availability: Link
4. The "Arms Race" on American Roads : The Effect of Heavy Vehicles on Traffic Safety and the Failure of Liability Rules
abstractDrivers have been running an 'arms race' on American roads by buying increasingly heavy vehicles such as SUVs, vans and light trucks. Families view large vehicles as providing better protection to their own occupants if a crash occurs, but these vehicles pose an increased danger to occupants of smaller vehicles and to pedestrians and bicyclists. This paper measures both the beneficial internal effect and the negative external effect of heavier vehicles. The main result is that when drivers replace cars with light trucks, 3,700 additional crashes per year involving fatalities of smaller vehicle occupants, pedestrians and bicyclists occur, while only 1,400 crashes involving fatalities of light truck occupants are avoided, i.e., the ratio of negative external effects to positive internal effects is 2« to 1. The paper argues that none of the existing traffic laws or institutions forces drivers of heavy vehicles to take account of their negative external effects
White, Michelle J.;2021
Availability: Link
5. Medical Malpractice : an Empirical Examination of the Litigation Process
abstractNew data on medical malpractice claims against a single hospital where a direct measure of the quality of medical care is available are used to address 1) the specific question of the role of the negligence rule in the dispute settlement process in medical malpractice, and 2) the general question of how the process of negotiation and dispute resolution in medical malpractice operates with regard to both the behavior of the parties and the outcome of the process. We find that the quality of medical care is an extremely important determinant of deferdants' medical malpractice liability. More generally, we find that the data are consistent with a model where 1) the plaintiff is not well informed ex ante about the likelinood of negligence and 2) the ex ante expected value to the plaintiff of a suit is high relative to the costs of filing a suit and getting more information. Thus, suits are filed even where there is no concrete reason to believe there has been negligence, and virtually all suits are either dropped or settled based on the information gained after filing. We conclude that the filing of suits that appear, ex post, to be nuisance suits can be rational eguilibrium behavior, ex ante, where there is incomplete information about care quality
Farber, Henry S.; White, Michelle J.;2021
Availability: Link
6. In-State Versus Out-Of State Students : The Divergence of Interest between Public Universities and State Governments
abstractThis paper examines the divergence of interest between universities and state governments concerning standards for admitting in-state versus out-of-state students. States have an interest in using universities to attract and retain high ability individuals because they pay higher taxes and contribute more to economic development. In contrast, universities have an interest in their graduates being successful, but little interest in where students come from or where they go after graduation. We develop and test a model that illustrates the divergence of interest between universities and their states. We find that public universities set lower minimum admissions standards for in-state than out-of-state applicants, presumably following their states' preferences, while private universities on average treat both groups equally. However we find that states in fact gain financially when public universities admit additional out-of-state students. This is because attending a public university in a particular state increases marginal students' probability of locating in the state after graduation by the same amount regardless of whether students are from in-state or out-of-state. And because marginal out-of-state students earn more, their expected future state tax payments are higher. We also estimate states' financial gain when public and private universities admit additional in-state versus out-of-state students who have middle and high ability levels. Surprisingly, we find that high ability students tend to be at least as strongly influenced in their adult location choices by where they attend university than are middle and low ability students. Since high ability students also earn more, this suggests that states gain financially when their universities attract high ability students, regardless of whether the students are from in-state or out-of-state or the universities are public or private. Our results suggest a rationale for public support of flagship public universities that can attract high-ability students
Groen, Jeffrey A.; White, Michelle J.;2021
Availability: Link
7. Asbestos and the Future of Mass Torts
abstractAsbestos was once referred to as a miracle mineral' for its ability to withstand heat and it was used in thousands of products. But exposure to asbestos causes cancer and other diseases. As of the beginning of 2001, 600,000 individuals had filed lawsuits for asbestos-related diseases against more than 6,000 defendants. 85 firms have filed for bankruptcy due to asbestos liabilities and several insurers have failed or are in financial distress. More than $54 billion has been spent on the litigation higher than any other mass tort. Estimates of the eventual cost of asbestos litigation range from $200 to $265 billion. The paper examines the history of asbestos regulation and asbestos liability and argues that it was liability rather than regulation that eventually caused producers to eliminate asbestos from most products by the late 1970s. But despite the disappearance of asbestos products from the marketplace, asbestos litigation continued to grow. Plaintiffs' lawyers used forum-shopping to select the most favorable state courts techniques for mass processing of claims, and substituted new defendants when old ones went bankrupt. Because representing asbestos victims was extremely profitable, lawyers had an incentive to seek out large numbers of additional plaintiffs, including many claimants who were not harmed by asbestos exposure. The paper contrasts asbestos litigation to other mass torts involving personal injury and concludes that asbestos was unique in a number of ways, so that future mass torts are unlikely to be as big. However new legal innovations developed for asbestos are likely to make future mass torts larger and more expensive. I explore two mechanisms-- bankruptcies and class action settlements--that the legal system has developed to resolve mass torts and show that neither has worked for asbestos litigation. The first, bankruptcy by individual asbestos defendants, exacerbates the litigation by spreading it to non-bankrupt defendants. The second, a class action settlement, is impractical for asbestos litigation because of the large number of defendants. As a result, Congressional legislation is needed and the paper discusses the compensation fund approach that Congress is currently considering
White, Michelle J.;2021
Availability: Link
8. Explaining the Flood of Asbestos Litigation : Consolidation, Bifurcation, and Bouquet Trials
abstractThe number of asbestos personal injury claims filed each year is in the hundreds of thousands and has been increasing rather than decreasing over time, even though asbestos stopped being used in the early 1970's. Eighty firms have filed for bankruptcy due to asbestos liabilities including 30 filings since the beginning of 2000. This paper examines why asbestos claims are increasing over time. Because large numbers of asbestos claims are filed in particular courts, judges in these courts have adopted procedural innovations intended to clear their dockets by encouraging mass settlements. These innovations cause trial outcomes to change in plaintiffs' favor. As a result, the innovations make the asbestos crisis worse by giving plaintiffs' lawyers an incentive to file large numbers of additional claims in the same courts. The paper uses a new dataset of asbestos trials to test the hypothesis that three important procedural innovations--consolidated trials, bifurcation, and bouquet trials--favor plaintiffs and therefore encourage the filing of additional claims. I find that bifurcation and bouquet trials nearly triple plaintiffs' expected return from trial, while consolidations of up to seven lawsuits raise plaintiffs' expected return from trial by one- third to one-half
White, Michelle J.;2021
Availability: Link
9. Using bankruptcy to reduce foreclosures : does strip-down of mortgages affect the mortgage market?
Li, Wenli; Tewari, Ishani; White, Michelle J.;2019
Type: Aufsatz in Zeitschrift; Article in journal;
Availability: Link
Citations: 2 (based on OpenCitations)
10. Using bankruptcy to reduce foreclosures : does strip-down of mortgages affect the supply of mortgage credit?
Li, Wenli; Tewari, Ishani; White, Michelle J.;2014
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability:
