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Race, Police Violence, and Financial Decision-Making

Author

Listed:
  • Vicki L. Bogan
  • Lisa A. Kramer
  • Chi Liao
  • Alexandra Niessen-Ruenzi

Abstract

We find an economically and statistically significant effect of race-based police violence on home ownership and retirement savings. Using restricted-use Panel Study of Income Dynamics data, we show that Black individuals exposed to the fatality of a Black person caused by or involving police subsequently experience decreased homeownership, home equity, and defined contribution pension participation relative to non-Black individuals in the same zip code. Our findings suggest that race-based violence affects not only those immediately involved but also entire racial communities in the vicinity. These decreases in illiquid assets imply negative long-term consequences for Black households' wealth accumulation.

Suggested Citation

  • Vicki L. Bogan & Lisa A. Kramer & Chi Liao & Alexandra Niessen-Ruenzi, 2024. "Race, Police Violence, and Financial Decision-Making," AEA Papers and Proceedings, American Economic Association, vol. 114, pages 163-168, May.
    • Handle: RePEc:aea:apandp:v:114:y:2024:p:163-68
    DOI: 10.1257/pandp.20241101
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    More about this item

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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