Showing papers on "Damages published in 2009"

On Modeling and Interpreting the Economics of Catastrophic Climate Change

Abstract: With climate change as prototype example, this paper analyzes the implications of structural uncertainty for the economics of low- probability, high-impact catastrophes. Even when updated by Bayesian learning, uncertain structural parameters induce a critical "tail fattening" of posterior-predictive distributions. Such fattened tails have strong im- plications for situations, like climate change, where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages. This paper shows that the economic consequences of fat-tailed structural uncertainty (along with unsureness about high-temperature damages) can readily outweigh the effects of discounting in climate-change policy analysis.

Efficient Pollution Regulation: Getting the Prices Right

Abstract: This paper argues for efficient environmental regulations that equate the mar ginal damage of pollution to marginal abatement costs across space. The paper estimates the source-specific marginal damages of air pollution and calculates the welfare gain from making the current sulfur dioxide allowance trading pro gram for power plants more efficient. The savings from using trading ratios based on marginal damages are between $310 and $940 million per year. The potential savings from setting aggregate emissions efficiently and from includ ing more sources of air pollution are many times higher. (JEL H23, Q53, Q58)

Economic aspects of adaptation to climate change: integrated assessment modelling of adaptation costs and benefits

Abstract: The present report seeks to inform critical questions with regard to policy mixes of investments in adaptation and mitigation, and how they might vary over time. This is facilitated here by examining adaptation within global Integrated Assessment Modelling frameworks. None of the existing Integrated Assessment Models (IAMs) captures adaptation satisfactorily. Many models do not specify the damages from climate change, and those that do mostly assume implicitly that adaptation is set at an “optimal” level that minimizes the sum total of the costs of adaptation and the residual climate damages that might occur. This report develops and applies a framework for the explicit incorporation of adaptation in Integrated Assessment Models (IAMs). It provides a consistent framework to investigate “optimal” balances between investments in mitigating climate change, investments in adapting to climate change and accepting (future) climate change damages. By including adaptation into IAMs these already powerful tools for policy analysis are further improved and the interactions between mitigation and adaptation can be analysed in more detail. To demonstrate the approach a framework for incorporating adaptation as a policy variable was developed for two IAMs– the global Dynamic Integrated model for Climate and the Economy (DICE) and its regional counterpart, the Regional Integrated model for Climate and the Economy (RICE). These modified models – AD-DICE and AD-RICE – are calibrated and then used in a number of policy simulations to examine the distribution of adaptation costs and the interactions between adaptation and mitigation. Using the limited information available in current models, and calibrating to a specific damage level, so-called adaptation cost curves are estimated for the world. Adaptation cost curves are also estimated for different regions, although given the limited information available to calibrate the regional curves these should be considered as rough approximations of the actual adaptation potential in the different regions. These adaptation cost curves reflect how different adaptation levels will provide a wedge between gross damages (i.e. damages that would occur in the absence of adaptation) and residual damages. The analysis presented suggests that a good adaptation policy matters especially when suboptimal mitigation policies are implemented. Similarly, a good mitigation strategy is more important when optimal adaptation levels are unattainable. The rationale for this result is that both policy control options can compensate to some extent for deviations from the efficient outcome caused by non-optimality of the other control option. It should be noted, however, that in many cases there are limits to adaptation with regard to the magnitude and rate of climate change. The higher the current value of damages, the more important mitigation is as a policy option in comparison to adaptation. The comparison between adaptation and mitigation therefore depends crucially on the assumptions in the model, and especially on the discount rate and the level of future damages. The policy simulations also suggest that to combat climate change in an efficient way, short term optimal policies would consist of a mixture of substantial investments in adaptation measures, coupled with investments in mitigation, even though the latter will only decrease damages in the longer term. The costs of inaction are high, and thus it is more important to start acting on mitigation and adaptation even when there is limited information on which to base the policies, than to ignore the problems climate change already poses. Ongoing increases in expected damages over time imply that adaptation is not an option that should be considered only for the coming decades, but it will be necessary to keep investing in adaptation options, as both the challenges and benefits of adaptation increase. The results of these policy simulations confirm the findings of the Intergovernmental Panel on Climate Change (IPCC) on the relationship between adaptation and mitigation as described in the Synthesis Report of the Fourth Assessment Report. The framework developed in this report opens the door for further simulations that examine adaptation cost issues within other, more complex IAMs. The model additions investigated in this report can also shed light on how the next generation of IAMs will look. These tools can also be further strengthened by the incorporation of more detailed regional knowledge on the impacts of climate change and of adaptation options.

An introduction to medical malpractice in the United States.

Abstract: Medical malpractice law in the United States is derived from English common law, and was developed by rulings in various state courts. Medical malpractice lawsuits are a relatively common occurrence in the United States. The legal system is designed to encourage extensive discovery and negotiations between adversarial parties with the goal of resolving the dispute without going to jury trial. The injured patient must show that the physician acted negligently in rendering care, and that such negligence resulted in injury. To do so, four legal elements must be proven: (1) a professional duty owed to the patient; (2) breach of such duty; (3) injury caused by the breach; and (4) resulting damages. Money damages, if awarded, typically take into account both actual economic loss and noneconomic loss, such as pain and suffering.

Understanding and enhancing the public's behavioural response to flood warning information

Abstract: Drawing on evidence from the United Kingdom and elsewhere in Europe, this paper explores how people have responded to flood warning information and how these responses impact upon the effectiveness of a flood warning through saving lives and injuries, and reducing economic damages Methods of flood warning that the public rely upon are discussed alongside empirical evidence of how flood victims prepare for, and respond to, flood warnings in rapid to medium-onset floods The paper investigates why some members of the public fail to act appropriately, or most effectively, to flood warning information, touching on ideas of a lack of understanding, mistrust in authority and a lack of ownership of flood reducing actions The paper examines the styles of public learning about flood warning response which might be most appropriate and effective, and how recent positive steps to increase the public's understanding of effective response might be further enhanced in the United Kingdom Copyright © 2009 Royal Meteorological Society

Handbook on Contingent Valuation

Abstract: Contents: 1. Introduction Anna Alberini and James R. Kahn PART I: CONTINGENT VALUATION AND ECONOMIC THEORY 2. Fifty Years of Contingent Valuation V. Kerry Smith 3. A Practitioner's Primer on the Contingent Valuation Method John C. Whitehead 4. The Use of Contingent Valuation in Benefit-Cost Analysis John C. Whitehead and Glenn C. Blomquist 5. Hypothetical Preferences and Environmental Policy Gregory Cooper 6. Protest Bids, Commensurability, and Substitution: Contingent Valuation and Ecological Economics Brent Haddad and Richard Howarth PART II: ECONOMETRIC AND EMPIRICAL ISSUES IN CONTINGENT VALUATION 7. An Introduction to Choice Modeling for Non-market Valuation Steven Stewart and James R. Kahn 8. Experimental Methods for the Testing and Design of Contingent Valuation Laura O. Taylor 9. Designing a Contingent Valuation Study to Estimate the Benefits of the Conservation Reserve Program on Grassland Bird Populations Mary Clare Ahearn, Kevin J. Boyle and Daniel R. Hellerstein 10. Modelling Behaviour in Dichotomous Choice with Bayesian Methods Carmelo J. Leon and Roberto Leon 11. Temporal Reliability in Contingent Valuation (with a Restrictive Research Budget) Paul M. Jakus, Becky Stephens and J. Mark Fly PART III: APPLICATIONS 12. Non-market Valuation on the Internet Hale W. Thurston 13. Use of Contingent Values of Wildlife and Habitat Preservation in Policy and Benefit-Cost Analyses John B. Loomis 14. Valuing Wildlife at Risk from Exotic Invaders in Yellowstone Lake Todd L. Cherry, Jason F. Shogren, Peter Frykblom and John A. List 15. The Demand for Insecticide-Treated Mosquito Nets: Evidence from Africa Christine Poulos, Maureen Cropper, Julian Lampietti, Dale Whittington and Mitiku Haile 16. Choice Modeling of Farmer Preferences for Agroforestry Systems in Calakmul, Mexico James F. Casey 17. The Use of Contingent Valuation in Developing Countries: A Quantitative Analysis Dan Biller, Karoline Rogge and Giovanni Ruta 18. Combining Stated-Choice and Stated-Frequency Data with Observed Behavior to Value NRDA Compensable Damages: Green Bay, PCBs, and Fish Consumption Advisories William S. Breffle, Edward R. Morey, Robert D. Rowe and Donald M. Waldman 19. Public Preferences Toward Environmental Risks: The Case of Trihalomethanes Richard T. Carson and Robert Cameron Mitchell 20. Conclusions Anna Alberini and James R. Kahn Index

At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes

Abstract: The United States and other nations are facing large-scale risks at an accelerating rhythm. In 2005, three major hurricanes--Katrina, Rita, and Wilma -- made landfall along the U.S. Gulf Coast within a six-week period. The damage caused by these storms led to insurance reimbursements and federal disaster relief of more than $180 billion -- a record sum. Today we are more vulnerable to catastrophic losses because of the increasing concentration of population and activities in high-risk coastal regions of the country. The question is not whether but when, and how frequently, future catastrophes will strike and the extent of damages they will cause. Who should pay the costs associated with catastrophic losses suffered by homeowners in hazard-prone areas? In At War with the Weather, Howard Kunreuther and Erwann Michel-Kerjan with their colleagues deliver a groundbreaking analysis of how we currently mitigate, insure against, and finance recovery from natural disasters in the United States. They offer innovative, long-term solutions for reducing losses and providing financial support for disaster victims that define a coherent strategy to assure sustainable recovery from future large-scale disasters. The amount of data collected and analyzed and innovations proposed make this the most comprehensive book written on these critical issues in the past thirty years.

Uncertainty and variability in health-related damages from coal-fired power plants in the United States.

Abstract: The health-related damages associated with emissions from coal-fired power plants can vary greatly across facilities as a function of plant, site, and population characteristics, but the degree of variability and the contributing factors have not been formally evaluated. In this study, we modeled the monetized damages associated with 407 coal-fired power plants in the United States, focusing on premature mortality from fine particulate matter (PM2.5). We applied a reduced-form chemistry-transport model accounting for primary PM2.5 emissions and the influence of sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions on secondary particulate formation. Outputs were linked with a concentration-response function for PM2.5related mortality that incorporated nonlinearities and model uncertainty. We valued mortality with a value of statistical life approach, characterizing and propagating uncertainties in all model elements. At the median of the plant-specific uncertainty distributions, damages across plants ranged from $30,000 to $500,000 per ton of PM2.5, $6,000 to $50,000 per ton of SO2, $500 to $15,000 per ton of NOx, and $0.02 to $1.57 per kilowatt-hour of electricity generated. Variability in damages per ton of emissions was almost entirely explained by population exposure per unit emissions (intake fraction), which itself was related to atmospheric conditions and the population size at various distances from the power plant. Variability in damages per kilowatt-hour was highly correlated with SO2 emissions, related to fuel and control technology characteristics, but was also correlated with atmospheric conditions and population size at various distances. Our findings emphasize that control strategies that consider variability in damages across facilities would yield more efficient outcomes.

An Analysis of Adaptation as a Response to Climate Change

Abstract: Climate change is likely to have relevant effects on our future socio-economic systems. It is therefore important to identify how markets and policy jointly react to expected climate change to protect our societies and well-being. This study addresses this issue by carrying out an integrated analysis of both optimal mitigation and adaptation at the global and regional level. Adaptation responses are disentangled into three different modes: reactive adaptation, proactive (or anticipatory) adaptation, and investments in innovation for adaptation purposes. The size, the timing, the relative contribution to total climate-related damage reduction, and the benefit-cost ratios of each of these strategies are assessed for the world as a whole, and for developed and developing countries in both a cooperative and a non-cooperative setting. The study also takes into account the role of price signals and markets in inducing and diffusing adaptation. This leads to two scenarios: A pessimistic one, in which policy-driven adaptation bears the burden, together with mitigation, of reducing climate damage; and an optimistic one, in which markets also autonomously contribute to reducing some damages by modifying sectoral structure, international trade flows, capital distribution and land allocation. For all scenarios, the costs and benefits of adaptation are assessed using WITCH, an integrated assessment, intertemporal optimization, forward-looking model. Extensive sensitivity analysis with respect to the size of climate damages and of the discount rate has also been carried out.

Additive damages, fat-tailed climate dynamics, and uncertain discounting

Abstract: This paper in applied theory argues that there is a loose chain of reasoning connecting the following three basic links in the economics of climate change: 1) additive damages may be more appropriate for analyzing the impacts of global warming than multiplicative damages; 2) an uncertain feedback-forcing coefficient, which might be near one with infinitesimal probability, can cause the distribution of the future time trajectory of global temperatures to have fat tails and a high variance; 3) when highvariance additive damages are discounted at an uncertain rate of pure time preference, which might be near zero with infinitesimal probability, it can make expected present discounted disutility very large. Some possible implications for welfare analysis and climate-change policy are briefly noted.

The Currency of Justice: Fines and Damages in Consumer Societies

Abstract: Fines and monetary damages account for the majority of legal sanctions across the whole spectrum of legal governance. Money is, in key respects, the primary tool law has to achieve compliance. Yet money has largely been ignored by social analyses of law, and especially by social theory. The Currency of Justice examines the differing rationalities, aims and assumptions built into money’s deployment in diverse legal fields and sanctions. This raises major questions about the extent to which money appears as an abstract universal or whether it takes on more particular meanings when deployed in various areas of law. Indeed, money may be unique in that it can take on the meanings of punishment, compensation, denunciation or regulation. The Currency of Justice examines the implications of the ‘monetization of justice’ as life is increasingly regulated through this single medium. Money not only links diverse domains of law; it also links legal sanctions to other monetary techniques which govern everyday life. Like these, the concern with monetary sanctions is not who pays, but that money is paid. Money is perhaps the only form of legal sanction where the burden need not be borne by the wrongdoer. In this respect, this book explores the view that contemporary governance is less concerned with disciplining individuals and more concerned with regulating distributions and flows of behaviours and the harms and costs linked with these.

Simulating past droughts and associated building damages in France.

Abstract: . Droughts can induce important building damages due to shrinking and swelling of soils, leading to costs as large as for floods in some regions. Previous studies have focused on damage data analysis, geological or constructional aspects. Here, a study investigating the climatic aspects of soil subsidence damage is presented for the first time. We develop a simple model to examine if the meteorology has a considerable impact on the interannual variability of damages from soil subsidence in France. We find that the model is capable of reproducing yearly drought-induced building damages for the time period 1989–2002, thus suggesting a strong meteorological influence. Furthermore, our results reveal a doubling of damages in these years compared to 1961–1990, mainly as a consequence of increasing temperatures. This indicates a link to climate change. We also apply the model to the extreme summer of 2003, which caused a further increase in damage by a factor four, according to a preliminary damage estimate. The simulation result for that year shows strong damage underestimation, pointing to additional sources of vulnerability. Damage data suggest a higher sensitivity to soil subsidence of regions first affected by drought in the 2003 summer, possibly due to a lack of preparedness and adaptation. This is of strong concern in the context of climate change, as densely populated regions in Central Europe and North America are expected to become newly affected by drought in the future.

Asbestos Cases in the Italian Courts: Duelling with Uncertainty

Abstract: The article investigates Italian civil Courts case-law on asbestos damages, focusing mainly on the issues of causation and fault. The diseases caused by asbestos exposure are often multifactorial diseases, to which the test of condition sine qua non cannot be applied to ascertain causation. The analysis of Italian case-law reveals a lack of uniformity in the criteria adopted to affirm the causation, contrasted by the uniformity of the criteria used to held the fault of the defendants. Such situation generates uncertainty in the protection of the rights of both the petitioners and the defendants. The lack of homogeneity in the criteria applied to establish the existence of causation is not exclusive of asbestos compensation cases, but is a constant characteristic of Italian civil case law, only lately reversed. Lastly, the author suggests some criteria that could be applied to ascertain causation in asbestos cases and other multifactorial diseases.

The Holmesian Bad Man's First Critic

Abstract: Holmes’s “bad man” view of the common law and his effort to capture contractual liability as option to perform or pay damages grew out of a debate he was having with another legal scholar in an exchange of letters that has largely been forgotten. Holmes’s opponent in this debate — Edward Avery Harriman — was in many respects a kindred spirit, someone who, like Holmes, was a positivist trying to fashion an objective account of the law of contract. Their disagreement was not so much about the role that morals and ethics ought to play in the law of contract, but rather about whether Harriman’s own theory — one that distinguished between primary and secondary obligations — provided the best explanation of the law of contract. The essay recaptures the contours of the debate and reassesses Harriman’s alternative theory of contract.

The Globalization of Class Actions: An Overview

Abstract: In less than a decade, the number of countries that permit representative litigation by private actors has multiplied dramatically. A minority of these procedures share all the features of the American class action for money damages. But there is a trend toward permitting private individuals and organizations to come forward on behalf of absent parties to obtain injunctive or declaratory relief or monetary compensation in some or all circumstances. Whether these procedures will spread to other countries or within countries to a wide variety of substantive legal matters and whether in particular private actors will be allowed to claim money damages in many or all instances is uncertain. Currently, the key obstacles to effective implementation of class action procedures are traditional legal funding rules that do not easily accommodate the realities of representative litigation.

Estimating the Effect of Damages Caps in Medical Malpractice Cases: Evidence from Texas

Abstract: Using claim-level data, we estimate the effect of Texas’s 2003 cap on noneconomic damages on jury verdicts, post-verdict payouts, and settlements in medical malpractice cases closed during 1988–2004. For pro-plaintiff jury verdicts, the cap affects 47-percent of verdicts and reduces mean allowed non-economic damages, mean allowed verdict, and mean total payout by 73-percent, 38-percent, and 27-percent, respectively. In total, the non-econ cap reduces adjusted verdicts by $156M, but predicted payouts by only $60M. The impact on payouts is smaller because a substantial portion of the above-cap damage awards were not being paid to begin with. In cases settled without trial, the non-econ cap affects 18-percent of cases and reduces predicted mean total payout by 18-percent. The non-econ cap 1 We owe special thanks to Fang Zhang, Myungho Paik, and Kevin Kavanagh for their work in analyzing the data, and to Vicky Knox at the Texas Department of Insurance for patiently answering our many questions. For comments and suggestions, we thank Einer Elhauge, Meredith Kilgore, Russell Korobkin, Ed Richards, Cathy Sharkey, those who attended presentations of the paper at the Leonard Davis Institute of Health Economics at the University of Pennsylvania, Rand Institute for Civil Justice, and the Harvard, Stanford, University of Kansas and Washington University Schools of Law, and participants at the Annual Meetings of the Canadian and Midwest Law and Economics Association, and the Conference on Empirical Legal Studies. Funding for this study was provided by the Jon David and Elizabeth A. Epstein Program in Health Law and Policy at the University of Illinois College of Law and by the Center on Lawyers, Civil Justice, and the Media at the University of Texas School of Law. The working paper version of this article is available at http://ssrn.com/abstract=995649. 2 Hyman is Richard W. and Marie L. Corman Professor of Law and Professor of Medicine, University of Illinois. Tel. 217-333-0061, email: dhyman@law.uiuc.edu. Hyman is the corresponding author. Black is Hayden W. Head Regents Chair for Faculty Excellence, University of Texas Law School, and Professor of Finance, University of Texas, Red McCombs School of Business. Tel. 512-471-4632, email: bblack@law.utexas.edu. Silver is McDonald Endowed Chair in Civil Procedure, University of Texas Law School. Tel. 512-232-1337, email: csilver@law.utexas.edu. Sage is James R. Dougherty Chair for Faculty Excellence in Law, University of Texas School of Law, and Vice-Provost for Health Affairs, University of Texas at Austin. Tel. 512-232-7806, email: wsage@law.utexas.edu. 356 ~ Hyman, Black, Silver, Sage: Estimating the Effect of Damages Caps in Medical Malpractice Cases has a smaller impact on settled cases than tried cases because settled cases tend to involve smaller payouts. The impact of the non-econ cap varies across plaintiff categories. Deceased, unemployed, and (likely) elderly plaintiffs suffer a larger percentage reduction in payouts than living, employed, and non-elderly plaintiffs. We also simulate the effects of different caps and fi nd substantial differences in cap stringency across states. Different caps reduce aggregate payouts in tried cases (all cases) by between 16-percent and 65-percent (7-percent and 42-percent). Caps on total damages have especially large effects.

Cartel damages claims and the passing-on defense

Abstract: We develop a general framework for computing cartel damages claims. We decom- pose a direct purchaser plainti¤'s lost pro…ts in three parts: the price overcharge, the pass-on eect and the output eect. The output eect is usually neglected: it is the lost business resulting from passing on the price overcharge. To evaluate the relative importance of the three eects, we introduce various models of imperfect competition for the plainti¤'s industry. We show that the passing-on defense generally remains jus- ti…ed after accounting for the output eect, provided that the cartel aects a su¢ cient number of …rms. We derive exact discounts to the price overcharge, and illustrate how to compute these in the European vitamin cartel. We …nally extend our framework to measure the cartel's total harm, i.e. the total damages to direct purchasers and their consumers.

Contracting in the shadow of the law

Abstract: Economic models of contract typically assume that courts enforce obligations based on verifiable events (corresponding to the legal rule of specific performance). As a matter of law, this is not the case. This leaves open the question of optimal contract design given the available remedies used by the courts. This article shows that American standard form construction contracts can be viewed as an efficient mechanism for implementing building projects given existing legal rules. It is shown that a central feature of these contracts is the inclusion of governance covenants that shape the scope of authority and regulate the ex post bargaining power of parties. Our model also implies that the legal remedies of mistake, impossibility and the doctrine limiting damages for unforeseen events developed in the case of Hadley v. Baxendale are efficient solutions to the problem of implementing complex exchange.

How the Merits Matter: Directors' and Officers' Insurance and Securities Settlements

Abstract: This Article seeks what may be the holy grail of securities law scholarship— the role of the “merits” in securities class actions—by investigating the relationship between settlements and directors’ and officers’ (D&O) liability insurance. Drawing upon in-depth interviews with plaintiffs’ and defense lawyers, D&O insurance claims managers, monitoring counsel, brokers, mediators, and testifying experts, we elucidate the key factors influencing settlement and examine the relationship between these factors and notions of merit in civil litigation. We find that, although securities settlements are influenced by some factors that are arguably merit related, such as the “sex appeal” of a claim’s liability elements, they are also influenced by many that are not, including, most obviously, the amount and structure of D&O insurance. The virtual absence of adjudication results in payment to the plaintiffs’ class for every claim surviving the motions stage and, as importantly, a lack of authoritative guidance about merit at settlement. Without such adjudication, the weight of various factual patterns is untested, and the validity of competing damages models remains

Economic valuation of damages originated by major accidents in port areas

Abstract: Due to special features of ports – variety of activities: storage and loading/unloading of hazardous materials; circulation of ships, lorries and trains; proximity to urban zones; etc – major accidents can be associated with severe damages The cost of such accidents must be known to allow for compensation to people and companies A procedure is presented to estimate the cost of damages suffered by people, equipment and environment Criteria to assess the cost of damage to people – a controversial issue – are discussed, establishing a method to predict the number of people killed, injured and evacuated Economic compensation is proposed Environmental damages are also considered These include potential damage to the atmosphere, soil, water and fauna Estimates of the cost of the equipment and buildings affected by the accident are proposed Finally, an assessment of the loss of profits due to activity breakdown and indirect costs is analysed The methodology presented can easily be extended to general, inland process and storage sites

The relationship between public antitrust enforcement and private actions for damages

Abstract: This paper concerns the relationship between public antitrust enforcement and private actions for damages, focusing in particular on the enforcement of Articles 81 and 82 EC. In the first half of…

The Effects of Tort Reform on Medical Malpractice Insurers' Ultimate Losses

Abstract: Whereas the literature evaluating the effect of tort reforms has focused on the impact of reforms on insurers' reported incurred losses, this article examines the ultimate effects of reforms using the developed losses from a comprehensive sample of insurers writing medical malpractice insurance from 1984 to 2003. Noneconomic damages caps are particularly influential in reducing medical malpractice losses and increasing insurer profitability. The long-run effects of these reforms are greater than insurers' expected effects; for example, 5- and 7-year developed loss ratios are below the initially reported incurred loss ratios for those years following the enactment of noneconomic damages caps. Analyses of reported losses consequently understate the ultimate effects of tort reforms. The quantile regressions show that reforms have the greatest effects for the firms that are at the high end of the loss distribution.

The Housing Crisis and Bankruptcy Reform: The Prepackaged Chapter 13 Approach

Abstract: The housing crisis threatens to destroy hundreds of billions of dollars of value by causing homeowners with negative equity to walk away from their houses. A house in foreclosure is worth 30 to 50 percent less than a house that a homeowner either retains or sells on the market, and a foreclosed house damages neighboring property values as well. We advocate a reform of Chapter 13 that would allow homeowners to strip down the value of their mortgages in a prepackaged bankruptcy. Such a plan would give homeowners an incentive to keep or resell their homes, thus reducing the market value loss of homes while protecting the effective value of creditors' interests. Two further key elements of the plan are that it uses prices based on the average house price in a particular ZIP code, which reduces moral hazard; and it is automated, requiring only a rubber stamp by a bankruptcy judge or other official, thus preserving judicial resources. Other plans, including that of the Obama administration, are compared.

Article 4. And Traffic Accidents

Abstract: This chapter examines the current European conflicts regime for road traffic accidents and tries to evaluate the need for further legislative steps. It starts with scrutinizing the relationship between the Rome II Regulation and the Hague Convention. The chapter analyses the general conflicts rules of the Rome II Regulation, i. e. Articles 4 and 14. It looks at the scope of the law applicable, which is of particular relevance with regard to the controversial issue of the quantification of damages. The general methodological approach of the Rome II Regulation is a sound solution for traffic accidents: A preference for the place of injury, derogation from lex loci delicti where the parties share a common habitual residence, a lean escape clause which ensures a necessary degree of flexibility, and a liberal approach to party autonomy. Keywords: conflicts rules; habitual residence; Hague convention; party autonomy; Rome II regulation; traffic accidents

Tort law and economics

Abstract: Contents: General Introduction PART I: EFFICIENT LIABILITY RULES 1. Strict Liability versus Negligence Hans-Bernd Schafer and Frank Muller-Langer 2. Contributory and Comparative Negligence in the Law and Economics Literature Mireia Artigot i Golobardes and Fernando Gomez Pomar PART II: CAUSATION AND MULTIPLE TORTFEASORS 3. Causation and Foreseeability Omri Ben-Shahar 4. Joint and Several Liability Lewis A. Kornhauser and Richard L. Revesz 5. Vicarious and Corporate Civil Liability Reinier H. Kraakman PART III: DAMAGES 6. Tort Damages Louis T. Visscher 7. Pure Economic Loss Jef De Mot 8. Non Pecuniary Losses Siewert D. Lindenbergh and Peter P.M. van Kippersluis 9. Punitive Damages A. Mitchell Polinsky and Steven Shavell PART IV: SPECIFIC CASES 10. Environmental Liability Michael Faure 11. Products Liability Mark A. Geistfeld 12. Medical Malpractice Steve Boccara PART V: ALTERNATIVE COMPENSATION SYSTEMS 13. Tort Law and Liability Insurance Gerhard Wagner 14. No-Fault Compensation Systems Karine Fiore PART VI: OTHER PERSPECTIVES ON TORT LAW 15. Harmonizing Tort Law: A Comparative Tort Law and Economics Analysis Willem H. van Boom PART VII: EMPIRICS 16. Empirics of Tort Ben C.J. van Velthoven Index

Clearing the Air: The Health and Economic Damages of Air Pollution in China (review)

Abstract: China's historic economic expansion is driven by fossil fuels, which increase its emissions of both local air pollutants and greenhouse gases dramatically. Clearing the Air is an innovative, quantitative examination of the national damage caused by China's degraded air quality, conducted in a pathbreaking, interdisciplinary U.S.-China collaboration. Its damage estimates are allocated by sector, making it possible for the first time to judge whether, for instance, power generation, transportation, or an unexpected source such as cement production causes the greatest environmental harm. Such objective analyses can help China reset policy priorities. Clearing the Air uses this information to show how appropriate \"green\" taxes might not only reduce emissions and health damages but even enhance China's economic growth. It also shows to what extent these same policies could limit greenhouse gases, suggesting that wealthier nations have a responsibility to help China build environmental protection into its growth. Clearing the Air is written for a diverse audience, providing a bridge from underlying research to policy implications, with easily accessible overviews of issues and summaries of the findings for nonspecialists and policymakers followed by more specialized, interlinked studies of primary interest to scholars. Taken together, these analyses offer a uniquely integrated assessment that supports the book's economic and policy recommendations.