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Obesity and Credit Risk

Katherine Guthrie

College of William and Mary - Mason School of Business

Jan Sokolowsky


April 9, 2012

Obesity provides a potentially informative signal about individuals' choices and preferences. Using NLSY survey data, we estimate that the loan delinquency rate among the obese is 20 percent higher than among the non-obese after controlling for numerous observable, prohibited, and - to lenders - unobservable credit risk factors. The economic significance of obesity for delinquencies is comparable to that of job displacements. Obesity is particularly informative about future delinquencies among those with low credit risk. In terms of channels, we find that the obesity effect is at least partially mediated through poor health, but is not attributable to individuals' time preferences.

Number of Pages in PDF File: 73

Keywords: obesity, default, delinquency, bankruptcy, financial distress, personal finance, household finance, consumer credit

JEL Classification: D12, D91, G00, G19, I19

working papers series

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Date posted: March 19, 2011 ; Last revised: June 29, 2012

Suggested Citation

Guthrie, Katherine and Sokolowsky, Jan, Obesity and Credit Risk (April 9, 2012). Available at SSRN: http://ssrn.com/abstract=1786536 or http://dx.doi.org/10.2139/ssrn.1786536

Contact Information

Katherine Guthrie
College of William and Mary - Mason School of Business ( email )
P.O. Box 8795
Williamsburg, VA 23187-8795
United States
7572212832 (Phone)
Jan Sokolowsky (Contact Author)
Independent ( email )
Feedback to SSRN

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References:  69

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