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Published in:

14-06-2017

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

Author: Gayle DeLong

Published in: Review of Industrial Organization | Issue 1/2018

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.

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The U.S. Centers for Disease Control and Prevention is a regulatory agency charged with promoting health in the United States. The agency recommends vaccine schedules for the U.S. population.

Dose data are not reported on annual basis, so I am unable to determine which vaccines had been licensed for at least 5 years.

Bad publicity could also reduce sales. However, state governments mandate vaccines, so the effects of negative media reports are muted.

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Title: Is “Delitigation” Associated with a Change in Product Safety? The Case of Vaccines
Author: Gayle DeLong
Publication date: 14-06-2017
Publisher: Springer US
Published in: Review of Industrial Organization / Issue 1/2018
Print ISSN: 0889-938X
Electronic ISSN: 1573-7160
DOI: https://doi.org/10.1007/s11151-017-9579-7

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