The Eventual Decline of Empirical Law and Economics

Abstract

This Essay suggests the necessity of a co-evolutionary process among empirical and theoretical advances in law and economics. Empirical work alone is suggestive, but should not be taken too seriously. The weaknesses in empirical work, and by this I mostly mean regression-based work which has come to dominate law and economics, lead to a kind of virus that begins with over-statements and misapprehensions, and then spreads as more scholars copy the mistakes and engage in empirical work as a means of entry into the field. Regression-based work will become suspect as its current assumptions are questioned, and as replication failures reveal its weaknesses. Empirical work in law and economics looks very different when underlying distributions are not easily probed with regressions but are understood as reflecting power-laws, or as simply random. Once inconvenient distributions are acknowledged, the key question is why observations might be distributed in this fashion. This is likely to be a task for theorists as law and economics enters its next phase. On the other hand, empirical work has been important and has made law and economics a respectable science. The claim here is that good empirical work—especially in law and economics—is hard to produce, and it is important not to overvalue its products. Moreover, it is more useful when combined with good theory.