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Special Topics in Forensic Economics

Paper Session

Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PDT)

Manchester Grand Hyatt, Marina
Hosted By: National Association of Forensic Economics
  • Chair: William G. Brandt, Brandt Forensic Economics

Testing the Boundaries of Synthetic Cohort Techniques on Lifetime Earnings

William H. Rogers
,
W H Rogers, LLC

Abstract

When critiquing forensic economic reports, opposing council's or one's own, experts often look for unrealistic implications of a set of assumptions or projections. Unrealistic implications are more likely to be in long timeframes, for example in the case of injured children, where small differences in rates of change can lead to large and asymmetric results. Since a sufficient set of adopted growth rates and discount rates, including net discount rates, imply a relationship between the size of the future macroeconomy and the distributional shares, one can use these rates to illustrate the implications of an expert's report. In this paper, I develop both a simple set of procedures to detect unrealistic implications (i.e. the medical industry absorbing the entire macroeconomy) and a set of procedures to bound one's own adopted rates of change.

Economic Damages in Price Fixing Cases: A Difference-in-Difference Estimation Approach

Scott Dale Gilbert
,
Southern Illinois University-Carbondale

Abstract

When two or more firms collude to raise price above its competitive equilibrium level, customers lose some benefits of a competitive marketplace. The overcharge to customers is a standard measure of economic damages, and requires as an input an estimate of the competitive equilibrium price -- but for collusion. Two approaches to estimating the “but for” price are the lookback method – which relies on some past pre-collusion price, and the yardstick method – which relies on price in a comparable contemporaneous market. Each method can incur bias, and to address these biases the present work combines the two methods using a “difference in difference” econometric approach. Some economic models and computer simulation illustrate the approach, with variation in market fundamentals over time and across regions.

The Impact of Race on a Child’s Educational Attainment and Life Time Earnings

Lawrence M. Spizman
,
State University of New York-Oswego
John Kane
,
State University of New York-Oswego

Abstract

This paper examines the impact of using a race-neutral model on predicted educational attainment and income of a child in a personal injury legal matter. This is accomplished by comparing the results of the updated ordered probit model from Spizman and Kane (2019) which includes race, to the ordered probit without race.
Discussant(s)
Scott Dale Gilbert
,
Southern Illinois University-Carbondale
Christopher Young
,
Rutgers University
Kevin E. Cahill
,
Boston College
JEL Classifications
  • K2 - Regulation and Business Law