JOURNAL ARTICLE

What Determines Consumer Financial Distress? Place- and Person-Based Factors.

  • Published In: Review of Financial Studies, 2023, v. 36, n. 1. P. 42 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Keys, Benjamin J; Mahoney, Neale; Yang, Hanbin 3 of 3

Abstract

This article examines consumer financial distress in the United States using a nationally representative panel of TransUnion credit report data from 2000 to 2016, focusing on debt in collections, credit card delinquency, and personal bankruptcy. It documents large, persistent geographic disparities in financial distress, notably between the Deep South and the Upper Midwest. Through a "movers" analysis, the study finds that individual characteristics (such as financial literacy and risk preferences) primarily drive debt in collections and credit card delinquency, as these outcomes show little convergence after individuals move to different areas. In contrast, personal bankruptcy filings exhibit significant place-based effects, consistent with the influence of local legal factors and informational effects related to state-level bankruptcy laws and legal traditions. These findings suggest that while personal traits largely explain geographic variation in financial distress, local institutional factors notably affect bankruptcy decisions.

Additional Information

  • Source:Review of Financial Studies. 2023/01, Vol. 36, Issue 1, p42
  • Document Type:Article
  • Subject Area:Law
  • Publication Date:2023
  • ISSN:0893-9454
  • DOI:10.1093/rfs/hhac025
  • Accession Number:161419669
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