Leverage, Default, and Mortality: Evidence from Cancer Diagnoses

58 Pages Posted: 24 Mar 2015 Last revised: 18 Sep 2017

See all articles by Arpit Gupta

Arpit Gupta

NYU Stern School of Business

Edward R. Morrison

Columbia Law School

Catherine Fedorenko

Fred Hutchinson Cancer Research Center

Scott Ramsey

Fred Hutchinson Cancer Research Center

Date Written: September 12, 2017

Abstract

This paper tests whether housing wealth mitigates the effects of health shocks on financial stress and mortality. We link cancer records to mortgage, bankruptcy, foreclosure, and credit report data. We find that cancer diagnoses are financially destabilizing even for households with health insurance, but the effect is driven by households without home equity. Households with equity extract it (by refinancing a mortgage or taking out a second). They are also more likely to accept recommended therapies and have higher post-diagnosis survival rates. Our findings show that housing wealth plays an important role in understanding how individuals buffer idiosyncratic shocks.

Keywords: Cancer, Health Shocks, Household Financial Fragility, Foreclosure, Medical Bankruptcy, Adverse Shocks, Leverage, Debt Overhand, Household Finance

JEL Classification: D14, D12, G33, I13, K35, R20

Suggested Citation

Gupta, Arpit and Morrison, Edward R. and Fedorenko, Catherine and Ramsey, Scott, Leverage, Default, and Mortality: Evidence from Cancer Diagnoses (September 12, 2017). Columbia Law and Economics Working Paper No. 514; Columbia Business School Research Paper No. 15-35. Available at SSRN: https://ssrn.com/abstract=2583975 or http://dx.doi.org/10.2139/ssrn.2583975

Arpit Gupta

NYU Stern School of Business ( email )

Suite 9-160
New York, NY
United States

HOME PAGE: http://arpitgupta.info

Edward R. Morrison (Contact Author)

Columbia Law School ( email )

435 West 116th Street
New York, NY 10025
United States

Catherine Fedorenko

Fred Hutchinson Cancer Research Center ( email )

1100 Fairview Avenue North
M2-C206
Seattle, WA 98109-1024
United States

Scott Ramsey

Fred Hutchinson Cancer Research Center ( email )

1100 Fairview Avenue North
M2-C206
Seattle, WA 98109-1024
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
178
rank
158,154
Abstract Views
1,354
PlumX