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We explore the relationship between litigation rates and the number of lawyers, in a typical supplier-induced demand (SID) frame. Drawing on an original panel dataset for the 169 Italian courts of justice between 2000 and 2007, we rst document that the num- ber of lawyers is positively correlated with dierent measures of litigation rate. Then, using an instrumental variables strategy we nd that a 10 percent increase of lawyers over population is associated with an increase between 1.6 to 6 percent in civil litigation rates. Thus, our empirical analysis supports the SID hypothesis for the Italian lawyers: following an increase in their relative number, lawyers may exploit their informational advantage to induce clients to access to courts even when litigation is unnecessary or ineective.

Advocatus, Et Non Latro? Testing the Supplier-Induced-Demand Hypothesis for Italian Courts of Justice