Opioid Crisis Effects On Municipal Finance
60 Pages Posted: 12 Sep 2019 Last revised: 24 Oct 2019
Date Written: October 5, 2019
This paper provides county-level evidence on the impact of opioid abuse on U.S. municipalities' tax revenues, law enforcement costs, credit risk, and access to finance. Complementing prior research on various costs of the crisis at state- and national-levels, we offer a first close look at the effects of the crisis at a much more granular level of government. Our analysis is based on a comprehensive database, including licensed restricted-use data not previously analyzed in the literature. Employing instrumental variable regressions and difference-in-differences analysis, we find evidence of a significant causal decrease in affected municipalities' access to capital.
Keywords: Opioid crisis, Opioid mortality, Municipal markets, Municipal bond rating, Public finance
JEL Classification: G12, G18, H7, I15
Suggested Citation: Suggested Citation