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

Gayle DeLong ()
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Gayle DeLong: Baruch College, City University of New York

Review of Industrial Organization, 2018, vol. 52, issue 1, No 1, 53 pages

Abstract: 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 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s11151-017-9579-7

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