Topic: Pushing Boundaries: Political Redistricting and Consumer Credit

Speaker: Pat Akey, Assistant Professor of Finance, University of Toronto

Date: October 18th (Wednesday)

Time: 10:00-11:30am

Location: Building 4, Room 101

Language: English

Abstract:

Political borders affect consumers’ access to credit. We identify the effect of political boundaries by using the redistricting of Congressional districts following decennial U.S. Censuses and legal challenges combined with a large panel data set of consumer credit histories. We find that consumers lose access to credit when their Congressional district becomes more irregularly shaped (i.e., potentially more gerrymandered). The reduction in credit access is concentrated in states that allow elected politicians to draw political boundaries, providing evidence that the effects are the result of political processes. The effects are also strongest when Congressional districts become less politically competitive, and similarly, in independent tests, credit access falls in states that make it more difficult for constituents to vote. Our findings suggest that political redistricting can entrench politicians, thereby reducing their incentive to advocate for goods and services for their constituents.  

About the speaker:

Pat Akey is an Assistant Professor at the University of Toronto, having completed his PhD in Finance in 2014 from the London Business School. His research focuses on empirical corporate finance, specifically the interaction of law, politics and corporate behavior. He has presented his research at numerous major academic and practitioner conferences and published in the Review of Financial Studies, for which he received the 2016 Rising Scholar Award (best paper in the journal by a young researcher). He also received the 2013 Best Paper Award at the University of Southern California Finance PhD Conference. His research has been awarded several grants including a three-year award from the AXA Research Fund, as well as grants from the Connaught Group and the British Academy. Major media outlets such as The Economist have cited his work.