Statistical and Economic Approaches to Legal History Forthcoming in UNIV OF ILL. L REV. (2002)) Daniel klerman USC Law and Economics law and Public policy Research Paper No. 02-6 USC THE LAW SCHOOI LAW AND ECONOMICS RESEARCH PAPER SERIES ponsored by the John M. Olin Foundation University of Southern California Law school LoS Angeles, CA 90089-0071 This paper can be downloaded without charge from the Social Science Research Network electroniclibraryathttppapers.ssrn.com/abstractid=337500
Statistical and Economic Approaches to Legal History (Forthcoming in UNIV. OF ILL. L. REV. (2002)) Daniel Klerman USC Law and Economics & Law and Public Policy Research Paper No. 02-6 LAW AND ECONOMICS RESEARCH PAPER SERIES Sponsored by the John M. Olin Foundation University of Southern California Law School Los Angeles, CA 90089-0071 This paper can be downloaded without charge from the Social Science Research Network electronic library at http://papers.ssrn.com/abstract_id=337500
STATISTICAL AND ECONOMIC APPROACHES TO LEGAL HISTORY Daniel klerman Professor Klerman advocates increased use of economic and statistical approaches by legal historians. He documents the dearth o economic and statistical analysis in legal history and shows how use of these methods could contribute to the field. Professor Klerman shows these potential benefits by examining recent articles which use economics and statistics to explore the determinants and effects of le- gal change This article advances a simple hypothesis: legal history could bene fit from more attention to economics and statistics. Legal historians cur- rently make remarkably little use of economic theory and statistical tests Scholars outside the legal history community, most notably economists however, have begun to use rational choice theory and regression analy sis to investigate issues which are at the core of legal history-the causes of legal change and the effect of legal change on be would be enriched if historians took note of these new methods. eco- nomics and statistics cannot, of course, replace the methods currently in use,but, when used appropriately, they can complement current meth- ods-each method contributing its own insights and partially compensat ing for the weaknesses of the others The relative neglect of economics and statistics may reflect miser ceptions of these fields, both of which have changed dramatically in the last two decades. For example, legal historians may reject economic analysis because they view it as theoretical and abstract, as politically conservative, or as naively functionalist. While each of these claims ght have been true twenty years ago, they are largely false today. Part of the goal of this article is to bring to light more recent trends in eco nomics which have made it more empirical, less functionalist, less politi- cally charged, and thus more relevant to legal histor The author thanks John de figueiredo, Charles donahue, William W. Fischer, Thomas gallanis, Ariela Gross, Ron Harris, Dean Lueck, Eric Talley, Thomas Ulen, and Mark Weinstein for their sugges ons and criticisms. The author also thanks Jamaul Cannon, Christina Foster, and Steven Rosenfeld for their excellent research assistance
KLERMAN.DOC 4/11/2002 4:44 PM 101 STATISTICAL AND ECONOMIC APPROACHES TO LEGAL HISTORY Daniel Klerman* Professor Klerman advocates increased use of economic and statistical approaches by legal historians. He documents the dearth of economic and statistical analysis in legal history and shows how use of these methods could contribute to the field. Professor Klerman shows these potential benefits by examining recent articles which use economics and statistics to explore the determinants and effects of legal change. This article advances a simple hypothesis: legal history could benefit from more attention to economics and statistics. Legal historians currently make remarkably little use of economic theory and statistical tests. Scholars outside the legal history community, most notably economists, however, have begun to use rational choice theory and regression analysis to investigate issues which are at the core of legal history—the causes of legal change and the effect of legal change on behavior. Legal history would be enriched if historians took note of these new methods. Economics and statistics cannot, of course, replace the methods currently in use, but, when used appropriately, they can complement current methods—each method contributing its own insights and partially compensating for the weaknesses of the others. The relative neglect of economics and statistics may reflect misperceptions of these fields, both of which have changed dramatically in the last two decades. For example, legal historians may reject economic analysis because they view it as theoretical and abstract, as politically conservative, or as naively functionalist. While each of these claims might have been true twenty years ago, they are largely false today. Part of the goal of this article is to bring to light more recent trends in economics which have made it more empirical, less functionalist, less politically charged, and thus more relevant to legal history. * Professor of Law and History, University of Southern California Law School. The author thanks John de Figueiredo, Charles Donahue, William W. Fischer, Thomas Gallanis, Ariela Gross, Ron Harris, Dean Lueck, Eric Talley, Thomas Ulen, and Mark Weinstein for their suggestions and criticisms. The author also thanks Jamaul Cannon, Christina Foster, and Steven Rosenfeld for their excellent research assistance
UNIVERSITY OF ILLINOIS LAW REVIEW vo.2002 This article shares much with a forthcoming article by ron Harris, The Encounters of economic History and Legal History. Harris also ar gues that legal historians should pay more attention to economics and notes recent trends in that discipline that have made it more relevant to legal history. Harris's article, however, focuses on the New Historical nstitutional Economics. While i agree that this school has much to of fer, this article will focus more on statistical testing than on any single body of theor Part I of this article substantiates the claim that legal historians make little use of economics and statistics. It does so primarily through citation analysis of articles and books. Part II attempts to show how eco- nomics and statistics can contribute to legal history. It provides examples of recent works that use economics and statistics to illuminate the deter- minants and effects of legal change. Most of this research was neither published in legal history journals nor performed by people who would haracterize themselves as legal historians. As a result, it is largely un- known to the legal history community. . ECONOMICS AND STATISTICS IN LEGAL HISTORY This article starts from the premise that legal historians currently make little use of economics and statistics. That, of course, is an empiri cal assertion that requires substantiation. To that end, consider table 1 The first row of the table addresses the use of statistics. Regression is the most common and most powerful statistical method, so counting the number of articles and books that use regression is a good way of measuring the prevalence of statistical analysis. The first two columns show that only a single article in the most recent legal history journals used regression analysis. Because the Index to Legal periodicals covers law reviews and the gamut of interdisciplinary journals, it sheds light on legal history articles published outside of specialist journals. Regressio 1. Ron Harris. The Encounters of Economic History and Legal History, 21 LAW& HIST.(forth coming Summer 2003) 2. Id at 2, 11-17, 50-54, 59-60(citations to manuscript version). 3. ld at 3, 11-33, 52-54( citations to manuscript version). 4. The simplest statistical tool is a table. Use of tables is, of course, common in legal history Nevertheless, because it is difficult to disentangle the effect of several factors or to assess statistica with just a table, I do not consider use of tables to be evidence of serious statistical an sis.Of course, by that criterion, this very article -which has a table but no regressions-would not 5. That article is discussed in Part IL.A. 2. Of course, there are legal history journals other than the two in the table, but these are the only two available on-line. In addition, they are the only two American journals, so they are indicative of the American branch of the discipline. My impression is that legal historians in other countries are even less likely to use statistical and economic methods related interdisciplinary journals, I ignore articles of legal history that appeared in history journals The neglect of such journals partly reflects the fact that they are not generally accessible in searchable If the Ision of such journals results in a bias against legal history
KLERMAN.DOC 4/11/2002 4:44 PM 102 UNIVERSITY OF ILLINOIS LAW REVIEW [Vol. 2002 This article shares much with a forthcoming article by Ron Harris, The Encounters of Economic History and Legal History. 1 Harris also argues that legal historians should pay more attention to economics and notes recent trends in that discipline that have made it more relevant to legal history.2 Harris’s article, however, focuses on the New Historical Institutional Economics.3 While I agree that this school has much to offer, this article will focus more on statistical testing than on any single body of theory. Part I of this article substantiates the claim that legal historians make little use of economics and statistics. It does so primarily through citation analysis of articles and books. Part II attempts to show how economics and statistics can contribute to legal history. It provides examples of recent works that use economics and statistics to illuminate the determinants and effects of legal change. Most of this research was neither published in legal history journals nor performed by people who would characterize themselves as legal historians. As a result, it is largely unknown to the legal history community. I. ECONOMICS AND STATISTICS IN LEGAL HISTORY This article starts from the premise that legal historians currently make little use of economics and statistics. That, of course, is an empirical assertion that requires substantiation. To that end, consider Table 1. The first row of the table addresses the use of statistics. Regression is the most common and most powerful statistical method, so counting the number of articles and books that use regression is a good way of measuring the prevalence of statistical analysis.4 The first two columns show that only a single article in the most recent legal history journals used regression analysis.5 Because the Index to Legal Periodicals covers law reviews and the gamut of interdisciplinary journals, it sheds light on legal history articles published outside of specialist journals.6 Regression 1. Ron Harris, The Encounters of Economic History and Legal History, 21 LAW & HIST. (forthcoming Summer 2003). 2. Id. at 2, 11–17, 50–54, 59–60 (citations to manuscript version). 3. Id. at 3, 11–33, 52–54 (citations to manuscript version). 4. The simplest statistical tool is a table. Use of tables is, of course, common in legal history. Nevertheless, because it is difficult to disentangle the effect of several factors or to assess statistical significance with just a table, I do not consider use of tables to be evidence of serious statistical analysis. Of course, by that criterion, this very article—which has a table but no regressions—would not qualify as statistical. 5. That article is discussed in Part II.A.2. Of course, there are legal history journals other than the two in the table, but these are the only two available on-line. In addition, they are the only two American journals, so they are indicative of the American branch of the discipline. My impression is that legal historians in other countries are even less likely to use statistical and economic methods. 6. Of course, by looking at articles published in legal history journals, law reviews, and lawrelated interdisciplinary journals, I ignore articles of legal history that appeared in history journals. The neglect of such journals partly reflects the fact that they are not generally accessible in searchable form. If the exclusion of such journals results in a bias against legal history produced by historians in
To 4 STATISTICS AND ECONOMICS IN LEGAL HISTORY analysis is only slightly more common in these articles. Because books re a major vehicle for legal-historical writing, it is important to consider the use of statistics in books as well. The second to last column. how ever, indicates that very few legal history books contain regressions. The last column reports the number of regressions in the Yale law journal This column provides a useful comparison to mainstream legal scholar ship. It indicates that regression analysis is more common there, al though still relatively rare TABLE 1 REGRESSIONS AND CITATIONS TO ECONOMISTS IN LEGAL-HISTORICAL WRITING 1975-2000 merican Law and Articles Legal Yale Journal of History classified Law Review Journa 01 1 0 Ronald Coase 2 6 2 2 14 92 No, This row counts the number of articles or books which report the results of at least one regres- sion performed by the author of the article or book. These rows count the number of articles or books which cite Becker, Coase, Fogel, North, This column was calculated using Westlaw searches. Westlaw coverage of the American Journal of Legal History began in 1994. The 1999-2001 volumes have not been published yet. This journal is This column was calculated using Lexis searches. Lexis has much more complete coverage than Westlaw for Law and History Review, even though both claim coverage of the same years. The numbers in this column were computed by using Westlaw to compile a list of articles pub- lished in 1985, 1990, 1995. and 2000 classified as"legal history" by the Index to Legal Periodicals, downloading those which were available in full text on Westlaw(about two-thirds), and then using Microsofts Findfile tool to search the downloaded articles history departments, I hope that the last column-which examines books reviewed in legal history journals-at least partially corrects that bias 7. The figures could be interpreted to mean that statistics are much more common in nonspe cialist joumals, as regressions appear in almost one percent(2/240)of such articles, whereas they a ference, however, is mostly due to the fact that the legal history journals include a very large number of book ws, which are unlikely to contain regressions, whereas the Index to legal Periodicals da- abase includes relatively few
KLERMAN.DOC 4/11/2002 4:44 PM No. 4] STATISTICS AND ECONOMICS IN LEGAL HISTORY 103 analysis is only slightly more common in these articles.7 Because books are a major vehicle for legal-historical writing, it is important to consider the use of statistics in books as well. The second to last column, however, indicates that very few legal history books contain regressions. The last column reports the number of regressions in the Yale Law Journal. This column provides a useful comparison to mainstream legal scholarship. It indicates that regression analysis is more common there, although still relatively rare. TABLE 1 REGRESSIONS AND CITATIONS TO ECONOMISTS IN LEGAL-HISTORICAL WRITING, 1975–2000 American Journal of Legal History (1994- 1998)d Law and History Review (1996- 2001)e Articles classified as “Legal History” in Index to Legal Periodicals (1985-2000)f Legal History Books (1975- 2000)g Yale Law Journal (1996- 2001)h Regressionsa (performed) 0 1 2 2 4 Gary Beckerb (citations to) 0 1 2 2 17 Ronald Coaseb (citations to) 4 7 2 6 34 Robert Fogelb (citations to) 2 0 2 9 2 Douglass Northb (citations to) 0 2 2 8 5 Richard Posnerb (citations to) 14 14 29 16 92 Nc 464 435 240 332 366 Notes: a This row counts the number of articles or books which report the results of at least one regression performed by the author of the article or book. b These rows count the number of articles or books which cite Becker, Coase, Fogel, North, or Posner. c This row records the total number of books or articles (including book reviews) searched. d This column was calculated using Westlaw searches. Westlaw coverage of the American Journal of Legal History began in 1994. The 1999-2001 volumes have not been published yet. This journal is not on Lexis. e This column was calculated using Lexis searches. Lexis has much more complete coverage than Westlaw for Law and History Review, even though both claim coverage of the same years. f The numbers in this column were computed by using Westlaw to compile a list of articles published in 1985, 1990, 1995, and 2000 classified as “legal history” by the Index to Legal Periodicals, downloading those which were available in full text on Westlaw (about two-thirds), and then using Microsoft’s FindFile Tool to search the downloaded articles. history departments, I hope that the last column—which examines books reviewed in legal history journals—at least partially corrects that bias. 7. The figures could be interpreted to mean that statistics are much more common in nonspecialist journals, as regressions appear in almost one percent (2/240) of such articles, whereas they appear in barely one-tenth of one percent (1/861) of articles appearing in legal history journals. This difference, however, is mostly due to the fact that the legal history journals include a very large number of book reviews, which are unlikely to contain regressions, whereas the Index to Legal Periodicals database includes relatively few
104 UNIVERSITY OF ILLINOIS LAW REVIEW vo.2002 The numbers in this column were compiled by examining every book reviewed in 1975, 1980, 1990 and 2000 by American Journal of Legal History, Law and History Review, and the Journal of Le. gal History. The citations counts are based on citations in bibliographies or, if the book had no bibli ography, citations in footnotes. Since Law and did not begin pu includes books reviewed in that journal only since 1990. Similarly, since the Journal of Legal History did not begin publication until 1980, the table includes books reviewed in that journal only since that year. Since 1998 was the last complete year published by the American ournal of Legal History, that year was searched instead of the 2000 The numbers in this column were compiled using Westlaw The middle rows of the table count the number of articles that cite leading figures in law and economics and economic history. All but Richard posner are Nobel Prize winners. Yet, with the exception of Pos ner, they are hardly ever cited in works of legal history. In contrast, lead- ing law and economics scholars(Becker and Coase) are much more fre- quently cited in the Yale law Journal, although that journal cites the economic historians(Fogel and North) with roughly the same frequency as the legal history literature. Posner receives a fair number of citations in the legal history literature, although significantly fewer than in the Yale law Journal. In addition, many of the citations are to the less eco- nomic parts of his corpus-for example his work on Holmes and Car dozo. while the citations to posner indicate some interest in economics the predominance of citations to Posner suggests rather shallow research. Posner's works are often the most accessible, but a serious attempt to in- corporate economic insights would take historians deeper into the litera ture Although the overall numbers are small, the trend is positive There are more regressions and more citations to economists in the most recent articles and books, even taking into account the increasing num ber of legal history publications. IL. ECONOMIC AND STATISTICAL ANALYSIS OF LEGAL HISTORY Articles applying economics and statistics to legal-historical issues fall into two broad groups: those that explore the effects of legal change and those that try to explain legal change. Those in the former category are usually structured as"event studies, "i.e, attempts to predict and measure the effects of particular legal changes. Attempts to explain legal change, the second group, can be subdivided into two primary categories functionalist accounts, which see law as generally responding efficiently to changes in the nonlegal environment, and accounts rooted in public choice or positive political theory, which explain legal change as the product of interest groups and institutions
KLERMAN.DOC 4/11/2002 4:44 PM 104 UNIVERSITY OF ILLINOIS LAW REVIEW [Vol. 2002 g The numbers in this column were compiled by examining every book reviewed in 1975, 1980, 1990 and 2000 by American Journal of Legal History, Law and History Review, and the Journal of Legal History. The citations counts are based on citations in bibliographies or, if the book had no bibliography, citations in footnotes. Since Law and History did not begin publication until 1983, the table includes books reviewed in that journal only since 1990. Similarly, since the Journal of Legal History did not begin publication until 1980, the table includes books reviewed in that journal only since that year. Since 1998 was the last complete year published by the American Journal of Legal History, that year was searched instead of the 2000. h The numbers in this column were compiled using Westlaw. The middle rows of the table count the number of articles that cite leading figures in law and economics and economic history. All but Richard Posner are Nobel Prize winners. Yet, with the exception of Posner, they are hardly ever cited in works of legal history. In contrast, leading law and economics scholars (Becker and Coase) are much more frequently cited in the Yale Law Journal, although that journal cites the economic historians (Fogel and North) with roughly the same frequency as the legal history literature. Posner receives a fair number of citations, in the legal history literature, although significantly fewer than in the Yale Law Journal. In addition, many of the citations are to the less economic parts of his corpus—for example his work on Holmes and Cardozo. While the citations to Posner indicate some interest in economics, the predominance of citations to Posner suggests rather shallow research. Posner’s works are often the most accessible, but a serious attempt to incorporate economic insights would take historians deeper into the literature. Although the overall numbers are small, the trend is positive. There are more regressions and more citations to economists in the most recent articles and books, even taking into account the increasing number of legal history publications. II. ECONOMIC AND STATISTICAL ANALYSIS OF LEGAL HISTORY Articles applying economics and statistics to legal-historical issues fall into two broad groups: those that explore the effects of legal change and those that try to explain legal change. Those in the former category are usually structured as “event studies,” i.e., attempts to predict and measure the effects of particular legal changes. Attempts to explain legal change, the second group, can be subdivided into two primary categories: functionalist accounts, which see law as generally responding efficiently to changes in the nonlegal environment, and accounts rooted in public choice or positive political theory, which explain legal change as the product of interest groups and institutions