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Judicial Expenditures and Litigation Access: Evidence from Auto Injuries

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  • Paul Heaton
  • Eric Helland

Abstract

Despite claims of a judicial funding crisis, there exists little direct evidence linking judicial budgets to court utilization. Using data on thousands of auto injuries covering a 15-year period, we measure the relationship between state-level court expenditures and the propensity of injured parties to pursue litigation. Controlling for state and plaintiff characteristics and accounting for the potential endogeneity of expenditures, we show that expenditures increase litigation access, with our preferred estimates indicating that a 10 percent budget increase increases litigation rates by 3 percent. Consistent with litigation models in which high litigation costs undermine the threat posture of plaintiffs, increases in court resources also augment payments to injured parties. We present suggestive evidence that these effects are driven by general expenditures rather than judicial salaries.

Suggested Citation

  • Paul Heaton & Eric Helland, 2011. "Judicial Expenditures and Litigation Access: Evidence from Auto Injuries," The Journal of Legal Studies, University of Chicago Press, vol. 40(2), pages 295-332.
  • Handle: RePEc:ucp:jlstud:doi:10.1086/658863
    DOI: 10.1086/658863
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    References listed on IDEAS

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    Cited by:

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    2. Bielen, Samantha & Peeters, Ludo & Marneffe, Wim & Vereeck, Lode, 2018. "Backlogs and litigation rates: Testing congestion equilibrium across European judiciaries," International Review of Law and Economics, Elsevier, vol. 53(C), pages 9-22.

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