The Consumption Effects Associated with Filing for Personal Bankruptcy
AbstractThis article examines the response of food consumption to filing for personal bankruptcy in the spirit of previous work on the benefits of other social-insurance programs. Using the Panel Study of Income Dynamics (PSID), we find that an increase in the financial benefit to filing for bankruptcy increases the growth in food consumption. In addition, we find that filing under chapter 7 of the bankruptcy code provides consumption insurance, while filing under chapter 13 of the bankruptcy code provides no significant consumption benefits.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 71 (2005)
Issue (Month): 4 (April)
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
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- Guo, Sheng, 2010. "The superior measure of PSID consumption: An update," Economics Letters, Elsevier, vol. 108(3), pages 253-256, September.
- Hülya Eraslan & Wenli Li & Pierre-Daniel G. Sarte, 2007.
"The anatomy of U.S. personal bankruptcy under Chapter 13,"
07-05, Federal Reserve Bank of Richmond.
- Hülya Eraslan & Wenli Li & Pierre-Daniel Sarte, 2007. "The anatomy of U.S. personal bankruptcy under Chapter 13," Working Papers 07-31, Federal Reserve Bank of Philadelphia.
- Filer, Larry & Fisher, Jonathan D., 2007. "Do liquidity constraints generate excess sensitivity in consumption? New evidence from a sample of post-bankruptcy households," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 790-805, December.
- Song Han & Wenli Li, 2007. "Fresh Start or Head Start? The Effects of Filing for Personal Bankruptcy on Work Effort," Journal of Financial Services Research, Springer, vol. 31(2), pages 123-152, June.
- Thomas A. Garrett, 2007. "The rise in personal bankruptcies: the Eighth Federal Reserve District and beyond," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 15-38.
- Song Han & Geng Li, 2011.
"Household Borrowing after Personal Bankruptcy,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 43, pages 491-517, 03.
- Tal Gross & Matthew J. Notowidigdo & Jialan Wang, 2012. "Liquidity Constraints and Consumer Bankruptcy: Evidence from Tax Rebates," NBER Working Papers 17807, National Bureau of Economic Research, Inc.
- Wenli Li & Pierre-Daniel Sarte & Hulya Eraslan, 2007. "A Structural Model of Chapter 13 Personal Bankruptcy," 2007 Meeting Papers 972, Society for Economic Dynamics.
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