Daubert error rate in economic damage estimates

One question that attorneys in injury and wrongful death cases ask every now and then in depositions concerns the economic damages estimates 'error rate' . In most instances, the attorney asking the question is referring to the discussion of the error rate in the Daubert decision.

To some, see for example the article 'Kicking the Tires After Kuhumo' , the error rate does not really apply to economic testimony. Moreover it is not clear from a close read what is acceptable error.


That is, if one reads Daubert carefully it is obvious that they left out a lot in describing an error rate. All they really are saying is that the data should have a known error rate.

They did not say what an 'acceptable' error rate should be. For instance, we could say the error rate is XXX within 1 standard deviation, 2 standard deviations, 3 standard deviations, or 10 standard deviations. Literally speaking, any error rate is acceptable as no criterion for acceptable has been set.

It just has to be 'known.'

If you are an attorney asking questions about the error rate to an economist make sure you specify what error rate you are referring to.