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Review of Industrial Organization

, Volume 52, Issue 1, pp 1–53 | Cite as

Is “Delitigation” Associated with a Change in Product Safety? The Case of Vaccines

  • Gayle DeLong
Article

Abstract

This study investigates whether the threat of litigation induces firms to provide safer products in a regulated industry. I analyze whether removing litigation risk or “delitigation” of product liability is associated with a change in the safety of vaccines. Using U.S. nationwide and state-level data, I find that vaccines that were licensed after legislation that preempted most product liability lawsuits are associated with a significantly higher incidence of adverse events than were vaccines that were licensed under a previous regime that permitted consumers to sue. Oaxaca decomposition suggests that the difference is due to the policy change. The results suggest that product safety deteriorates when consumers are no longer able to sue manufacturers.

Keywords

Litigation risk Oaxaca decomposition Product liability Product safety Vaccine safety 

Notes

Acknowledgements

I am grateful for valuable comments from Lawrence White (the Editor) and two anonymous referees. I also thank Mary Holland, Robert Krakow, Susan Lee, Anthony Mawson, Jonathan Rose, David Yermack, and participants of the International Atlantic Economics Society 2013 conference, Pennsylvania Economics Association 2015 conference, and Baruch College seminar series for insightful comments. Any errors or omissions are my own.

Funding

Wasserman Endowment at Baruch College.

Compliance with Ethical Standards

Conflict of interest

The author filed a claim under the U.S. National Vaccine Injury Compensation Program, a program established under the National Childhood Vaccine Injury Act, for her daughter. The Office of Special Masters in the U.S. Court of Federal Claims dismissed the claim on the basis of untimely filing.

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Copyright information

© Springer Science+Business Media, LLC 2017

Authors and Affiliations

  1. 1.Baruch College, City University of New YorkNew YorkUSA

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