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Obesity and Household Financial Distress

Critical Finance Review, Forthcoming

78 Pages Posted: 19 Mar 2011 Last revised: 25 Oct 2014

Katherine Guthrie

College of William and Mary - Mason School of Business

Jan Sokolowsky

Independent

Date Written: October 14, 2014

Abstract

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.

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

JEL Classification: D12, D14, D91, G00, G19, I19

Suggested Citation

Guthrie, Katherine and Sokolowsky, Jan, Obesity and Household Financial Distress (October 14, 2014). Critical Finance Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1786536 or http://dx.doi.org/10.2139/ssrn.1786536

Katherine Guthrie

College of William and Mary - Mason School of Business ( email )

P.O. Box 8795
Williamsburg, VA 23187-8795
United States
7572212832 (Phone)

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