Econometrics: Legal, Practical, and Technical Issues
Files
Description
The Section of Antitrust Law is pleased to publish Econometrics: Legal, Practical, and Technical Issues. The economic expert has become a central figure in virtually every antitrust litigation or merger matter, and the importance of econometrics has increased significantly. A basic understanding of econometric principles has now become almost essential to the serious antitrust practitioner. This volume is designed to introduce lawyers to the theoretical and practical issues of econometrics, providing necessary tools for working effectively with economic experts on both sides of a matter. . . . Econometrics: Legal, Practical, and Technical Issues was born from a concern that the increasing use of econometrics in antitrust was creating an information gap between lawyers and economists, with potential effects on the quality of judicial determinations based on econometric evidence. In particular, econometricians were resenting highly sophisticated and abstract mathematical models to lawyers, many of whom were not schooled in these techniques and might not understand their significance. Moreover, econometricians were relying upon data that did not always accurately reflect the facts developed by the witnesses and the lawyers. Consequently, there was a concern that courts and agencies hearing antitrust matters might rely upon econometric evidence without a full understanding of its limitations or requirements, or might reject such evidence without recognizing its merits. Econometrics introduces readers to legal, practical, and technical issues in econometrics so that they can better understand the econometric analyses performed by their adversary or their own expert. This information may help them present these issues to courts and agencies more effectively. The purpose of this book is not to enable lawyers to perform econometric analysis, which is a highly technical field that requires a detailed understanding of matrix algebra and statistical theory, but simply to narrow the econometrics information gap. To that end, it provides case studies in which the parties or the government used econometric analysis. To make this volume as accessible as possible, equations and detailed mathematical proofs are kept to a minimum in the body of the text, with further detail in the appendices. Econometrics is divided into five parts: Part I introduces econometrics and discusses the legal issues raised by the use of econometric evidence, including admissibility of expert econometric testimony under Daubert v. Merrell Down Pharmaceuticals, Inc. (Chapter II), discovery of econometric evidence (Chapter III), and practical advice regarding the use of econometric evidence in jury trials (Chapter IV). Part II focuses on the view of the antitrust enforcement agencies regarding the use of econometric evidence, including some best practices regarding the use of econometrics before the FTC (Chapter V) and a review of four recent cases in which econometric evidence was presented to and used by the DOJ (Chapter VI). Part III illustrates how econometrics can be applied to a variety of practical antitrust contexts, including damage analysis (Chapter VII), class certification (Chapter VIII), auction markets (Chapter IX), and price discrimination (Chapter X). Part IV discusses the use of econometrics in analyzing the competitive effects of mergers, with particular attention to merger simulation, including the Antitrust Logit Model (ALM), the Almost Ideal Demand System (AIDS), and the proportionately-calibrated AIDS model (PCAIDS) (Chapter XI), as well as residual demand and price/cost analysis (Chapter XII). The first appendix of this volume then applies some of the theories presented earlier in a series of case studies: WorldCom’s proposed acquisition of Sprint, Staples’ proposed acquisition of Office Depot, and acquisitions among large incumbent local exchange carriers. The book concludes with three further appendices that explain in more detail many of the econometric terms and methods used elsewhere in the volume, including a discussion of Ordinary Least Squares Regression (OLS), the logit model, and a review of data problems, including issues raised by accounting data and scanner data.
Publication Date
2005
Edition
1
Recommended Citation
American Bar Association Section of Antitrust Law; Rubinfeld, Daniel L.; and Harkrider, John, "Econometrics: Legal, Practical, and Technical Issues" (2005). Faculty Books & Edited Works. 919.
https://gretchen.law.nyu.edu/fac-books-edited-works/919
