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Financial decision-making for Black individuals can be dealt a major blow by race-based police violence, new research suggests, offering insight into the far-reaching effects of police brutality.
The study, titled “Race, Police Violence, and Financial Decision-Making,” examined detailed American data on home ownership and contributions to a pension plan—using statistics broken down by ZIP code—as well as information on fatal police encounters.
The analysis suggests police violence negatively influence financial decision-making for Black individuals, even when they are not directly involved in the incidents.
“We find that when a member of the Black community is killed in a police incident, the members of that racialized group in that local area experience changes in their financial decision-making that are not just statistically significant, but economically large,” says co-author Lisa Kramer, a professor of finance in the department of management at University of Toronto Mississauga and the Rotman School of Management.
“I think what was most surprising was the magnitude of the effects.”
The study, which will appear in AEA Papers and Proceedings, was carried out by U of T’s Kramer, Duke University’s Vicki Bogan, University of Manitoba’s Chi Liao and University of Mannheim’s Alexandra Niessen-Ruenzi. It explored whether two key pieces of the “wealth pie” for most individuals—home ownership and retirement savings—might be affected by race-based police violence. While many studies have already looked at the grief and community trauma associated with race-based police violence, Kramer says the ripple effects on economic decision-making have been analyzed to a far lesser extent.
2024-05-22 03:51:02
Article from phys.org