Does Household Finance Affect the Political Process? Evidence from Voter Turnout During a Housing Crisis

63 Pages Posted: 14 Nov 2017 Last revised: 21 Apr 2020

See all articles by W. Ben McCartney

W. Ben McCartney

Purdue University - Krannert School of Management; Duke University - Finance

Date Written: February 10, 2020

Abstract

I examine the effect of house price declines on voter participation using a novel person-level panel dataset. Contrary to what the “angry voter hypothesis” predicts, I find that a ten percent decline in local house prices decreases the participation rate of the average mortgaged homeowner by 1.6 percentage points. Consistent with a financial distress channel, house price declines have no effects on renters and particularly severe effects on highly leveraged households. My findings are consistent with the existence of a feedback loop between financial distress and inequality operating through voter participation.

Keywords: Household Finance, Financial Distress, Mortgages, Voter Participation, Elections

JEL Classification: D10, D72, H31, R20

Suggested Citation

McCartney, W. Ben, Does Household Finance Affect the Political Process? Evidence from Voter Turnout During a Housing Crisis (February 10, 2020). Available at SSRN: https://ssrn.com/abstract=3068596 or http://dx.doi.org/10.2139/ssrn.3068596

W. Ben McCartney (Contact Author)

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Duke University - Finance ( email )

Durham, NC 27708-0120
United States

HOME PAGE: http://duke.edu/~wbm5

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