Estimating the Negative Credit Impacts of Police-involved Fatalities

IF 0.5 Q4 ECONOMICS PUBLIC FINANCE REVIEW Pub Date : 2024-05-07 DOI:10.1177/10911421241250088

Tatyana Guzman, Benjamin Y. Clark

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Abstract

George Floyd's killing in Minneapolis spotlighted the role of police-involved fatalities that cause immeasurable harm to victims’ families and communities, weaken public trust in government and may lead to civil unrest. Police-involved fatalities place a financial burden on the cities, given the size of awards to victims’ families and the cost of implementing consent decrees. By quantifying the impact of fatal encounters on city credit rating, this study offers evidence for policymakers to make informed decisions regarding policing practices in their cities. Credit ratings incorporate third-party perceptions of local governments’ fiscal, economic, demographic, and political performance. The credit rating agency Moody's has noted “the potential financial impact of ongoing litigation costs” surrounding police-involved fatalities as a driver of downgrading ratings. Our article examines the impact of fatal encounters on the creditworthiness of the 150 largest US cities from 2000 to 2019. We observe a consistent negative correlation between police-involved fatalities and credit ratings among all the model estimates. These correlations remain statistically significant over time. We also estimate that the larger the share of non-white victims of police violence, the lower the cities’ credit ratings are.

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估算涉警死亡事故的负面信用影响

乔治-弗洛伊德（George Floyd）在明尼阿波利斯（Minneapolis）被杀事件凸显了警察涉案致死事件的作用，它对受害者家庭和社区造成了无法估量的伤害，削弱了公众对政府的信任，并可能导致内乱。鉴于对受害者家庭的赔偿金额以及执行同意令的成本，警察致死事件给城市带来了沉重的财政负担。本研究通过量化死亡事件对城市信用评级的影响，为政策制定者就其城市的警务实践做出明智决策提供了证据。信用评级包含第三方对地方政府财政、经济、人口和政治表现的看法。信用评级机构穆迪（Moody's）指出，围绕警察致死事件的 "持续诉讼成本的潜在财务影响 "是降低评级的一个驱动因素。我们的文章研究了 2000 年至 2019 年间美国 150 个最大城市的致命事件对其信用度的影响。我们观察到，在所有的模型估计值中，涉警死亡事故与信用评级之间存在一致的负相关关系。随着时间的推移，这些相关性在统计上仍然显著。我们还估计，警察暴力的非白人受害者比例越大，城市的信用评级就越低。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

PUBLIC FINANCE REVIEW ECONOMICS-

CiteScore

1.30

自引率

0.00%

发文量

期刊介绍： Public Finance Review is a professional forum devoted to US policy-oriented economic research and theory, which focuses on a variety of allocation, distribution and stabilization functions within the public-sector economy. Economists, policy makers, political scientists, and researchers all rely on Public Finance Review, to bring them the most up-to-date information on the ever changing US public finance system, and to help them put policies and research into action. Public Finance Review not only presents rigorous empirical and theoretical papers on public economic policies, but also examines and critiques their impact and consequences. The journal analyzes the nature and function of evolving US governmental fiscal policies at the national, state and local levels.

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