Peer-Reviewed Publications in Forensic Economics
by Jeffrey Petersen & Phillip Allman
The Margin of Error on Damages Calculations Based on Sample Survey Data in Class Action Wage and Hour Cases
Citation: Journal of Legal Economics, Forthcoming, 2019
Authors: Jeffrey S. Petersen & Phillip Allman
Abstract: The margin of error associated with sample survey data has been a persistently controversial statistic when measuring class-wide damages in wage and hour cases, at least in California, if not generally. The source of controversy stems from two legal decisions which are thought to maintain that certain margins of error with respect to the sample mean were too high. The two cases, both from California, are Bell v. Farmers Insurance and Duran v. U.S. Bank. The Bell court found a relative margin of error of 32.4 percent was unacceptable whereas the Duran court found a relative margin of error of 43.3 percent was unacceptable. The Bell court also found a 9.6 percent relative margin of error acceptable. However, neither of these legal decisions explicitly specified the acceptable range for the margin of error. Moreover, these legal decisions do not address the potential remedies for a margin of error that may be considered too high. This article discusses a remedy that provides the courts with a projection of damages that allows them to make an award to the class members in accord with generally accepted statistical science that protects and balances the welfare of defendants and plaintiffs.
The Effect of the Intent to Retire at Age 70 or Older on Work Life Expectancy
Citation: Journal of Legal Economics, Volume 23, No. 2, April 2017
Authors: Jeffrey S. Petersen & Phillip Allman
Abstract: Forensic economists may receive a request from an attorney asking to project lost wages for his or her client to age 70 or older. This request is likely to occur when the plaintiff that attorney is representing is adamant with respect to how long he or she intended to work absent the incident of the legal case. Worklife expectancy tables will not provide a basis to make a computation of wage loss to age 70 or older unless the plaintiff had reached their late sixties as of the date of incident. However, worklife expectancy tables do not take into account ‘‘intent’’ since the tables are based on actual retirement patterns without knowledge of individuals’ retirement plans. Individuals who had the intent to retire at age 70 or older may significantly differ from individuals who planned to retire at earlier ages in the number of years they work. In 1992, participants in the Health and Retirement Study (HRS) were asked when they planned to retire. The HRS followed up with these same individuals every two years from 1994 to 2014 and asked about their work status. HRS participants who stated they planned to work to age 70 or older were indeed statistically different than individuals who planned to retire earlier. The intent to work to age 70 or older accounted for 2.5 increased work years, on average, compared to those who did not plan to work to age 70 or older.
Surveys in Class Action Wage and Hour Cases and the Use of Anonymous Respondents
Citation: Journal of Legal Economics, Volume 22, No. 1, October 2015
Authors: Jeffrey S. Petersen, Phillip Allman & William Lee
Abstract: Forensic economists face a choice when retained to project damages in a class action wage and hour case and need to survey the class members – should they conduct a survey themselves or rely upon a survey professional? In either case, forensic economists will need to be involved in developing the survey questions. A wage and hour survey is unlike most other surveys conducted by researchers since respondents can potentially receive substantial financial payments based on their responses. In order to obtain accurate estimates of past work hours, twenty-four hour time accounting should be utilized within the survey. Also, the survey participants should likely be told that their responses are not anonymous and that they may be held accountable for their answers at a deposition and/or trial testimony. Survey respondents may inflate work hours if informed that they will be anonymous – a classic problem of moral hazard because the surveyed class members bear no risk associated with the inflated responses while employers have to pay for them. The decision of anonymity will not come without controversy in the courtroom because the vast majority of literature on surveys advocates anonymous survey respondents. This article describes why conventional wisdom on anonymity does not apply in wage and hour surveys.