Judicial Expenditures and Access to Justice: Evidence from Auto Injuries

Abstract

Abstract: Despite claims of a judicial funding crisis, there exists little direct evidence linking judicial budgets to court access. Drawing from a database of thousands of auto injuries covering a 15-year period, we measure the relationship between state court expenditures and the propensity of injured parties to pursue litigation. Controlling for a wide variety of state and plaintiff characteristics and accounting for the potential endogeneity of expenditures, we demonstrate that a 10% increase in court budgets yields a 3% increase in litigation rates. Attorney representation also increases with court expenditures. Consistent with litigation models in which high litigation costs undermine the threat posture of plaintiffs, reductions in court resources also appear to lower payments to injury victims.