Econometrics: Legal, Practical and Technical Issues, Second Edition

01 March 2014
Edited By Dr. Lawrence Wu, with chapters by Dr. Lauren Stiroh, Dr. Ramsey Shehadeh, and Dr. Timothy Watts

The ABA Section of Antitrust Law has published a book on the use of econometrics in matters of antitrust and competition policy. The book, Econometrics: Legal, Practical and Technical Issues (Second Edition), was edited by NERA President Dr. Lawrence Wu. The use of econometrics -- and empirical analysis generally -- in antitrust cases reflects the increasing reliance by the courts and by the antitrust agencies on economic methods and testimony. The increasing use of econometric analysis in the field of antitrust, however, has created a knowledge gap. This Second Edition of Econometrics fills that gap by making econometrics approachable and understandable for non-economists.
The book also fills another gap: a practical gap in understanding that may limit the ways in which econometric analyses are applied in practice. This book will help attorneys appreciate the power and value of an econometric analysis and to work with economic experts more effectively by giving antitrust attorneys a better feel and understanding of why econometric techniques are useful and the types of applications in which statistics and econometrics can be and should be applied.

Two of the book's chapters were authored by economists from NERA's Antitrust and Competition Practice. Chapter 6, by NERA Senior Vice President Dr. Lauren Stiroh with Dr. G. Steven Olley, Adjunct Assistant Professor of Economics at Columbia University, focuses on the inferences that can be drawn from a regression analysis. The chapter emphasizes hypothesis testing, interpreting the results, specification testing, and evaluating the reliability of the results in light of potential specification or data problems.

Chapter 11, by NERA Senior Vice President and Antitrust Practice Chair Dr. Ramsey Shehadeh and Vice President Dr. Timothy Watts, examines the diagnostic and econometric tools most commonly used in merger analysis. The authors begin by describing the implementation and interpretation of these empirical methods, and then turn to a discussion of recent merger reviews that showcases these methods.

Numerous NERA staff contributed to the book. Members of NERA’s research staff, including John Scalf, Kate Foreman, Ipsita Agarwal, Brian Allen, Jennifer Bennett, Nathan Blalock, Morris Chow, Tyler Fach, Greg Klausner, and Joan Wolff reviewed and edited the book. Tracy Orcholski and Andrew Slottje contributed significantly to the chapter on the use of econometrics in recent merger cases. Morris Chow managed the final manuscript and worked to ensure the intellectual and professional quality of the final product. Katie Brown, Sally Holec, Mary Ly, and Silvia Santos also devoted many hours to get the manuscript ready for publication.

Econometrics: Legal, Practical and Technical Issues (Second Edition) will be a valuable resource for all antitrust attorneys who regularly work with economic experts and those who are interested in understanding the power of economics and econometric analysis in antitrust. To learn more or to purchase the book, please visit the ABA website.