Litigation and Social Capital : Divorces and Traffic Accidents in Japan

Are litigation rates higher where social capital is low? Using prefecture-level data, I ask whether Japanese in communities with high levels of "social capital" more readily settle their divorce and traffic accident disputes out-of-court. Although litigation rate studies often measure suits per capita, the more appropriate measure may involve suits per "dispute." For many categories of disputes we lack reliable data about the numbers of disputes involved, but for divorce and traffic accidents we do have those numbers. Using these data, I find that couples in communities withlow social capital are more apt to divorce, and so are those in poorer communities. Conditional on divorce, however, couples in low social-capital communities are not more likely to litigate the terms of their divorces. Note that litigation rates for divorce are higher in wealthier and better-educated communities, but unrelated to the availability of an attorney. I contrast this situation with disputes over serious traffic accidents. In these disputes, whether a party sues depends crucially on the availability of an attorney. Social capital also seems to reduce the litigation rate, but wealth and education (beyond their effect through attorney availability) do not matter