How Natural Experiments Can Help In Estimating Damages

Law360, February 15, 2018

In a Law360 article titled “How Natural Experiments Can Help In Estimating Damages,” Analysis Group Vice President Niall MacMenamin outlines how natural experiments – experiments based on observational rather than clinical data – can help economists construct the “but for” world that is crucial for the valuation of damages. He shows that natural experiments, which use real-world data in a retrospective fashion, can be used to establish causal inference. “Given sufficient data, a competent economic expert will be able to identify the potential to use natural experiments in helping to establish damages attributable to an alleged bad act,” MacMenamin writes. He also offers an example from a litigation matter of a natural experiment that was constructed to assess the causal link between an alleged wrongdoing and damages liability.

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