Presentation of Econometric Analyses

• Pages: 117-146

117

CHAPTER 7

PRESENTATION OF ECONOMETRIC ANALYSES

This chapter discusses the presentation of the results of econometric

analyses in antitrust litigation. Discussions on the presentation of

econometric results typically focus on live trial testimony. While this is

certainly important, careful thought should be given at all stages of the

litigation. This chapter broadens the discussion to include the preparation

of expert reports and the development of exhibits and demonstratives that

are included with litigation filings.

In presenting econometric analyses, it is important to strike the right

balance between technical and non-technical detail. This balance is

crucial. The reader or audience (particularly the finder of fact) must be

convinced that the analysis is rigorous and the author is truly qualified as

an expert. But including too much technical detail or focusing only on

the technical detail in the presentation may obscure the understanding of

the results or their importance.

The chapter begins by highlighting different audiences to whom the

econometric analyses may be relevant, and the considerations that should

be taken into account with respect to each of these audiences. Specific

guidelines are then provided for the presentation of econometric

analyses, as well as potential issues that are often faced in the

presentation of these results—both in the context of expert reports as

well as in the context of trial testimony. These issues are illustrated with

specific examples throughout the chapter.

A. Knowing Your Audience

Understanding the target audience—and what they hope to gain from

the expert’s report and testimony—will help the practitioner work with

the expert to frame her report and testimony properly, and present the

econometric analysis at the proper level of detail and accessibility. The

target audience, however, often will include several different groups, and

it is important to understand and address the specific needs of each group

in the audience.

118 Econometrics

1.

The Client

It is crucial to make the econometrics accessible and understandable

to the client who has asked the economic expert to undertake the

econometric analysis. Client representatives may include company

management, in-house counsel, or outside counsel retained by the

company, all of whom may need or want to read and understand the

economic analysis and its implications. A clear presentation will assist

the client in evaluating the relative strengths and weaknesses of the case,

and will reassure the client that the expert is able to distill difficult

concepts in ways that a judge or jury will find easy to follow. It will also

help the client to compare the econometric findings with details of the

industry and facts of the case, and thus identify concerns,

counterintuitive results, or possible issues that warrant further analysis.

2.

Opposing Counsel and Experts

Rule 26 of the Federal Rules of Civil Procedure requires a paid

expert witness to disclose all of her opinions and the bases for those

opinions. Rule 26 also requires that the expert disclose all data and

information considered. Therefore, if the expert witness has utilized an

econometric analysis as the basis for one or more conclusions, she is

required to describe the data that she has used and econometric analyses

she performed in reaching her results and conclusions.

The expert report will therefore be scrutinized by the team of

opposing counsel, who will likely enlist their own testifying or

consulting expert(s) in preparation for the expert’s deposition and cross-

examination. Inclusion of technical details allows the expert to have

important assumptions and steps documented in her deposition or

testimony, rather than forcing her to memorize those assumptions and

steps.

In addition, Rule 702 of the Federal Rules of Evidence requires that

(a) The expert’s scientific, technical, or other specialized

knowledge will help t he trier of fact to understand the evidence or to

determine a fact in issue; (b) The testimony is based on sufficient facts

or data; (c) The testimony is the p roduct of reliable principles and

methods; and (d) The expert has reliably applied the principles and

methods to the facts of the case.