Race, Poverty, and American Tort Awards: Evidence from Three Datasets

We investigate the impact of the race and income of the jury pool on trial awards. We find that the average tort award increases as black and Hispanic county population rates increase and especially as black and Hispanic county poverty rates increase. An increase in the black countypoverty rate of 1 percentage point tends to raise the average personal injury tort award by 3 to 10 percent. An increase in the Hispanic county-poverty rate of 1 percentage point tends to raise awards by as much as 7 percent although this effect is less well estimated. These effects imply that forum shopping for high-poverty minority counties could raise awards by hundreds of thousands of dollars. Average awards fall with increases in white (non-black, non-Hispanic) poverty rates in two of our datasets, thus making these findings even more surprising. Awards increase with black and Hispanic county-poverty rates even after controlling for a wide variety of other potential causes. Names are in alphabetical order. Alex Tabarrok, Department of Economics, George Mason University, Fairfax, VA, 22030 and Director of Research, The Independent Institute, Email: [email protected]. Eric Helland, Dept. of Economics, Claremont-McKenna College, email: [email protected]. The authors wish to thank Michael Krauss and seminar participants at Ball State University, University of Redlands, the Claremont Graduate University and Claremont McKenna College for comments. We are especially grateful to Ted Eisenberg for many helpful comments.