Werner Z. Hirsch

ECONOMIC ANALYSIS OF TORT LAW

Under tort law, once a physician–patient relationship has been established, it is the physicians responsibility to diagnose and treat the patient with due care. Failure by the physician to carry out his duty constitutes negligence, with the implication that the physician has engaged in malpractice. The injured patient can sue the physician under tort law and recover monetary damages. This chapter discusses a medical malpractice case, Helling v. Carey , that illustrates many facets and tensions within the field of medical malpractice in court and it reviews some reforms that took place from 1974 to 1975. The negligence law does not require the defendant to be altruistic in the sense of being self-abnegating. However, he or she is required to place the welfare of others and his or her own on an equal footing. Conduct that embodies a failure to do so leads to a judgment of negligence under the Incremental Standards of the Learned Hand formula. The chapter also discusses the concept of sovereign immunity and parole decisions. There is obvious merit in more carefully classifying parole decisions into discretionary and ministerial ones. Most decisions by parole agencies to implement those made by parole boards should fall into the second category. Removing immunity from many parole agency activities, though leaving individual officials and parole boards immune, is likely to lead to more carefully considered parole decisions.

The regulation of immobile housing assets under divided ownership1

Abstract The paper analyses a particular type of housing arrangement between owner of a housing unit and owner of the land on which it is sited, where the unit is partially or totally immobile. While the focus is on mobile-home parks, the analysis is also applicable to certain condominium and cooperative housing. After exploring reasons for divided asset ownership, the possibility that divided ownership of immobile housing assets can lead to opportunistic behavior in the form of rent increases and even “gouging” is discussed. Rent control and its effects are examined with emphasis on the resulting wealth transfer from landlord to tenant and the reduction in the number of new parks. Results from an empirical analysis of both issues are presented. While there is strong evidence of a wealth transfer to tenants after rent control enactment, it is not clear whether these gains are offset by losses occurred by tenants prior to enactment.

Fire Department Deployment Analysis: A Public Policy Analysis Case Study-- The RAND Fire Project.

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An inquiry into effects of mobile home park rent control

Abstract Mobile homes today provide an important housing mode in the United States, mainly because they are affordable. For example, they represent about 4.5% of Californias housing stock [11]. However, in many areas of the country, rapid increases in pad rents have substantially increased the costs of mobile home living. In response to this development, coach owners in a number of municipalities have attempted to enact mobile home park rent control ordinances, often with great success. In California, for example, rent control laws have been passed in 75 jurisdictions, particularly since 1978. More jurisdictions control mobile home pad rents in California than control conventional apartment rents. A unique aspect of the mobile home market is that ownership of the living space is commonly divided between two parties. The mobile home or coach owner usually owns only the housing unit, while he rents a pad (site) in a mobile home park on which he places his home. This separation of ownership affects the market for mobile home coaches, since the cost of living in a mobile home depends not only on the cost of the coach, but also on the rent charged by park owners. The market for mobile homes and pads offers, therefore, an interesting economic environment in which to study the economic effect of rent control on tenants. When apartment rents are controlled, the windfall gains to tenants, should such exist, can neither be ascertained nor measured (losses to landlords in the form of reductions in the value of rental property can be readily measured and some estimates have been made) [6]. However, since in the mobile home context usually the coach is individually owned while the pad is rented, enactment of rent control can be capitalized into the value (sales price) of the coach. Economists so far have neglected this issue, while in the last few years courts have become interested in it. Thus, the purpose of this paper is to construct a capitalization model and implement it with regard to mobile home rent control, i.e., to estimate the effect of the enactment of rent control ordinances on the resale value of mobile home coaches. We first present a review of key characteristics of mobile home parks and coaches as well as their owners, to be followed by a theoretical model of the market for mobile homes and for park pads. We will use this model in an empirical analysis which examines the extent that lower pad rents resulting from the enactment of rent control are capitalized into the sales prices of mobile home coaches in California. Finally, this papers findings are related to a recent Circuit Court ruling dealing with mobile home park rent control in the city of Santa Barbara.

Social experiments in economics

Economists have long faced the problem of how to measure the effect of changes in policy variables on the behavior of economic units. A variety of techniques have been used for this purpose in the past, including econometric models, simulation models of artificial populations, surveys of past behavior, and surveys with questions about behavior under hypothetical conditions. Each of these methods yields some approximation to the actual effects, how much is not clear, especially on a micro basis, since the true response remains unobservable. That it might be possible to measure these effects directly by the use of controlled experiments, as is so frequently done in fields such as biology and agriculture, seemed too far-fetched to merit serious consideration. Social experimentation does, however, just that. It seeks to measure the effects of changes in policy variables by applying these changes to human populations under conditions of controlled experimentation similar to that used in the physical and biological sciences. However, while controlled experiments in the physical sciences are usually designed to test the validity of an existing or proposed theory, social experiments are mainly employed to measure key effects of new or potential social programs. Theory still plays a key role, particularly in the economic experiments, as the conceptual framework for the measurement of the effects. A necessary condition for a social experiment is agreement on one or more policy objectives that are expected to lend themselves to being transformed into implementable programs. Ideally, experimentation should help formulate a program or to evaluate a proposed program. With this objective in mind,

A model of municipal labor markets

Abstract Municipal government is a large and growing source of employment, and it is generally agreed that it does not act like a competitive firm. The special characteristics of municipal government are used to try to identify the major differences from a competitive firm with respect to labor. Some observed phenomena are explained in the context of the model, and tentative policy implications are considered.

Effects of prevailing wage laws on municipal government wages

Abstract A number of authors have suggested that prevailing wage laws tend to raise the wages of covered employees. Yet, no one has previously tested this hypothesis directly. In OLS regressions the prevailing wage law is found to have a negative effect that is not statistically significant. In a two-stage procedure the effect is found to be positive and statistically significant in the preferred formulation. Further tests provide additional evidence that the existence of prevailing wage laws is responsive to economic conditions.

Habitability Laws and the Shrinkage of Substandard Rental Housing Stock

Recent years have seen a great upsurge in the number and types of laws that control the relationship between landlords and tenants. Particularly important among such laws are those which extend the warranty of habitability, often referred to as habitability laws. They award tenants new powers by substituting for the doctrine of caveat emptor the doctrine of caveat venditor. This paper examines the effects which habitability laws have had on the stock of substandard rental housing. Substandard housing is defined in four different ways, and for each a separate equation is estimated for the period 1960 to 1974-75. The most stringent of such laws - receivership laws - are found to have a statistically significant effect on the reduction of substandard housing in SMSAs. Specifically, between 1960 and 1974-75 in the presence of receivership laws the stock of substandard rental housing was found to have decreased on the average between 1.4 and 4.6 per cent, depending on how substandard is defined.

Effects of habitability and anti-speedy eviction laws on black and aged indigent tenant groups: An economic analysis

‘A decent home and suitable environment for every American family’ was a caU raised by Congress about 33 years ago.’ Many initiatives have been taken in the United States to make this goal a reality. They include such Federal efforts as public housing, urbah renewal, model eitics programs and housing allowance programs. In addition, state legislatures and the courts have redefined the retationship between landlords and tenants, by specifying requirements and providing remedies. Among the most potent of these are habitability. laws, often taking.the form of housing codes, and anti-speedy eviction laws. These legal requirements are of recent vintage and can be of particular importance to two major groups of indigent tenants-black tenants and aged tenants. On this subject, relatively little economic analysis has so far been undertaken. While an earlier paper examined certain welfare effects habitability laws have on indigent tenants. this paper focuses on the effects of habitability and anti-speedy eviction laws on the welfare of black and aged indigent tenants.2 Our concern with *these two kinds of laws and their effect on the welfare of black arid aged indigent tenants, should not imply that these arc the only remedial instruments made available to such tenants by legislatures and the courts. Other instruments include rent control ordinances, sometimes in association with just-cause eviction laws. anticonversion laws (which prohibit the conversion of apartments to condominiums or cooperatives), and anti-demolition ‘measures (which prohibit landlords rrom demolishing apartment buildings). However, most of these instruments are local and, therefore, empirical analyses are very difficuIt. Another class of instruments relates tothc broad subject of discrimination. Whi!c the United States Supreme Court has dcemcd the categories of race, national origin and alienage criteria by -which landlords are not pcrmittcd to discriminate, some states and local govcmmcnts also have passed age discrimination laws. An analysis of their wclfarc effects on indigent, black and aged tenants must await a separate paper.

Demand for education, and its estimation

Abstract Since education produces major externalities and has important merit want characteristics, the estimation of a demand schedule is extremely difficult. Demand estimation for higher education is made somewhat easier because of the great importance of the associated costs and the relevant private substitutes, i.e. private colleges and universities. Therefore higher education is a good candidate for the application of the individual (economic) preference approach, which is based on the assumption that individuals are aware of their need for education about as they are aware of their needs for products provided by the open market. The estimation of demand for primary and secondary education can rely only to a minor extent on the individual (economic) preference approach. The voters behavior approach analysis is likely to be more directly applicable. Study of the behavior of voters and the behavior of legislators and members of school boards can shed light on the demand for education. Analytic insight can be gained also by the “voting with ones feet”, and the “calculus of consent” methods. Finally, benefit-cost analysis can be applied in situations where education gives an extremely weak demand signal. In education we often are less interested in overall benefit-cost estimates than in the benefit-cost positions in which different important interest groups find themselves with regard to education. Such analysis requires the identification of significant interest groups, bargaining strategies, and bargaining patterns, as well as of ways in which education decision makers respond to group pressures.