We use differences‐in‐differences (DID) to assess the impact of damage caps on medical malpractice claims for states adopting caps between 1991–2004. We find that conventional DID estimators exhibit acute model sensitivity. As a solution, we offer (nonparametric) covariance‐adjusted randomization inference, which incorporates information about cap adoption more directly and reduces model sensitivity. We find no evidence that caps affect the number of malpractice claims against physicians.
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Donohue et al. (2007) studied this question.
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