Obesity and Household Financial Distress
College of William and Mary - Mason School of Business
August 11, 2014
Obesity provides a potentially informative signal about individuals' choices and preferences. Using NLSY survey data, we estimate that debt delinquency is 20 percent higher among the obese than the non-obese after controlling for an extensive set of financial and economic credit risk factors. The economic significance of obesity for delinquencies is comparable to that of job displacements. Obesity is particularly informative about delinquencies among those with low credit risk. In terms of channels, we find that the conditional obesity effect is partially mediated through health, but is not attributable to individuals' attitudes, time and risk preferences, or cognitive skills.
Number of Pages in PDF File: 76
Keywords: obesity, default, delinquency, bankruptcy, financial distress, personal finance, household finance, consumer credit
JEL Classification: D12, D14, D91, G00, G19, I19working papers series
Date posted: March 19, 2011 ; Last revised: September 8, 2014
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