Judicial arbitration of unfair dismissal cases: The role of peer effects

Abstract

The paper analyses how peer effects affect judicial decisions over dismissal disputes in Australian labour courts. Using a panel of judges and data over 2000 unfair dismissal decisions we first test for selection effects and for randomized matching of judges to cases. We then use spatial econometrics methods to test whether individual judges’ decisions depend on the behaviour and/or characteristics of their peer group. We do not find evidence of endogenous (behavioural) peer effects, but we find significant exogenous (characteristics) peer effects. Show more