The Empirical Side of Law & Economics

Abstract

When I joined the Law School faculty almost thirty years ago, I already had published several empirical papers on law and economics but I knew little law. I was hired as an economist. My friends were economists. My wife was an economist. I knew Richard Posner because of his enthusiasm for economics, but knew none of the other law professors at Chicago. Although my appointment continued the Law School's long tradition of having an economist on its faculty, the faculty and most law students had little interest in economics. Unlike other law schools, Chicago was not hostile to economics. But outside the field of antitrust law, most of its faculty believed that economics had little to contribute to understanding the law. This may surprise many readers because Ronald Coase had been a member of the Law School faculty since 1962 and had published his celebrated article The Problem of Social Cost in 1960.1 That article, which is the foundation of the modern application of economics to all fields of law, was cited by the Nobel committee in awarding Coase the Nobel Prize in economics in 1991. Things are different today. Economics has become a central part of legal education, scholarship, and practice. All major law schools have one or more economists on their faculty; many young legal scholars have both law degrees and Ph.D.'s in economics (for example, three members of the Chicago Law School faculty have both law degrees and advanced degrees in economics); economic analysis of law is widely considered the most important development in legal thought in the last fifty years;2 economics has been systematically integrated into most areas of law, including even art law; and economic evidence has played an increasingly important role in the practice of law not only in antitrust but in contracts, intellectual property, securities, environmental law, and discrimination law. Other indicia of the growth of law and economics include the formation of The American Law and Economics Association in 1991, which now has more than one thousand