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The political economy of asset seizure reform.

JEL D70 * E62 ? K00

Recent high-profile events involving law enforcement such as Ferguson, Missouri have left the nation debating the appropriate limits of police authority. One source of concern surrounds asset seizure laws. These laws enable law enforcement agencies to seize a certain value of assets from individuals suspected of or convicted of a crime. For example, current California law enables the seizure of assets worth less than $25,000 after a successful conviction. According to the California Department of Justice's 2014 Annual Report of Asset Forfeiture, the estimated total value of assets seized for more than 3000 initiated forfeiture cases is $36,265,159. While there are several concerns surrounding asset seizure as currently practiced by law enforcement, a common concern is that in all states except Minnesota, Montana, Nevada, New Mexico, and North Carolina, assets can be seized without a criminal conviction.

In California, S.B. 443 was introduced in response to this concern. The bill would require a criminal conviction for the permanent seizure of assets, otherwise they would be returned. In September 2015, a vote was taken in the California State Assembly on the bill. The bill failed to pass, with 24 votes in favor and 41 against. In this note we report the results of research explaining the political economy factors influencing votes on S.B. 443.

We do so for two reasons. First, we want to better understand the drivers of asset seizure reform and this note is the first research to do so. Second, our paper is a contribution to the policy diffusion literature in economics (Hoffer, Contemporary Economic Policy, 2016) and political science (Shipan and Volden, American Journal of Political Science, 2008). This literature looks at the factors influencing state adoption of policies such as tobacco taxes. Here we add to this literature by analyzing the failure to adopt a policy within a state that is a first mover. Unlike the larger literature that analyzes how newer policies spread across localities, we provide insight into why some policies might never gain traction.

Our dependent variable is a binary variable where vote = 1 if the district's assembly member voted yes and vote--0 if he or she voted no on SB-443. Of the 80 assembly districts, 12 assembly members did not vote, which reduces our cross-section to a sample of 68 observations. In accordance with the median voter model, we identified a number of demographic indicators to describe voter preferences in each district averaged from years 2009-2013, such as the population of children, median income, and foreign-born population.

The population of children is included since assembly districts with lots of children might have more fiscal stress that would incentive asset seizures. Median income is assumed to be positively related to reform, since districts with higher income should have less fiscal stress incentivizing asset seizure. Similarly, areas with more foreign-born population are assumed to be in favor of asset seizure reform. Data were obtained from the website, kidsdata.org. Given the role of race in recent debates surrounding criminal justice reform, we also obtained the percentage of the population of each assembly district that was African American at the time of the 2010 Census from the Los Angeles Times.

We estimate our empirical model with probit, using robust standard errors to account for heteroscedasticity. Our model has a pseudo R-squared of 0.42 and shows statistical significance for all explanatory variables at the 1 % and 5 % level. Child population is the only indicator with a negative predicted relationship. Districts with more children may have heavier tax burdens because of a smaller tax base, in which case asset seizure becomes a substitute means of funding local government. Alternatively, larger populations of children may mean more concerned parents in favor of strong law enforcement.

The remaining independent variables have a positive relationship with member voting on asset seizure reform. The proportions of district population that are black and foreign-bom are both positive and significant at the 1 % level. Calculated at the means of all variables, a one unit increase in the percentage of a district's residents ages 25-64 that are foreign bom is associated with a 1.6 percentage point higher probability of their member voting for reform. A one percentage point increase in the percentage of a district's residents that is African-American is estimated to increase the probability of a yes vote by 6.87 %. Finally, higher median income is positively associated with a yes vote at the 5 % level of significance.

These results lend some insight into the factors influencing politician voting on asset seizure reform. In addition, they contribute to the larger literature on policy diffusion by showing how many policies are not studied because, in order to spread across states, policies have to pass in at least one state.

Acknowledgments The authors would like to acknowledge general research support from the Center for Free Enterprise within the College of Business and Economics at West Virginia University.

DOI 10.1007/s11294-016-9587-7

Joshua C. Hall [1] * Joylynn Pruitt [2]

Published online: 30 May 2016

[mail] Joshua C. Hall

joshua.c.hall@gmail.com

[1] Department of Economics, Research Associate, Regional Research Institute, West Virginia University, 1601 University Ave, PO Box 6025, Morgantown, WV 26506-6025, USA

[2] Mary Wollstonecraft Fellow, Department of Economics, West Virginia University, Morgantown, WV 26506, USA
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Title Annotation:RESEARCH NOTE
Author:Hall, Joshua C.; Pruitt, Joylynn
Publication:International Advances in Economic Research
Article Type:Report
Geographic Code:1U9CA
Date:Aug 1, 2016
Words:884
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