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Local Conditions and Debt in Collections

Author

Listed:
  • Breno Braga
  • Signe‐Mary Mckernan
  • Caroline Ratcliffe
  • Brett Theodos
  • John Chalekian
  • Christopher Trepel

Abstract

Using credit reporting firm records on 7 million individuals in the United States, we first demonstrate that debt in collections varies significantly across the country; specifically, the South and West regions have higher shares of individuals with debt in collections than other regions. Second, we identify local factors that are strongly related to debt in collections. Results from our regression models show that neighborhoods with higher rates of debt in collections are more likely to have (1) lower health insurance coverage; (2) lower home values and homeownership rates, (3) a higher share of delinquent and underwater mortgages, (4) lower household incomes, and (5) a higher share of African Americans and Latinos. While our analysis does not identify the causal mechanisms that determine financial distress, the analyses developed here can facilitate research on such mechanisms.

Suggested Citation

  • Breno Braga & Signe‐Mary Mckernan & Caroline Ratcliffe & Brett Theodos & John Chalekian & Christopher Trepel, 2019. "Local Conditions and Debt in Collections," Journal of Consumer Affairs, Wiley Blackwell, vol. 53(4), pages 2058-2085, December.
    • Handle: RePEc:bla:jconsa:v:53:y:2019:i:4:p:2058-2085
    DOI: 10.1111/joca.12283
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    Cited by:

    1. Paul Goldsmith-Pinkham & Maxim L. Pinkovskiy & Jacob Wallace, 2020. "The Great Equalizer: Medicare and the Geography of Consumer Financial Strain," Staff Reports 911, Federal Reserve Bank of New York.
    2. Paul Goldsmith-Pinkham & Maxim Pinkovskiy & Jacob Wallace, 2020. "Medicare and the Geography of Financial Health," Working Papers 2020-004, Human Capital and Economic Opportunity Working Group.

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