Does Household Finance Affect Elections? Evidence from a Housing Crisis

49 Pages Posted: 14 Nov 2017 Last revised: 7 May 2019

See all articles by W. Ben McCartney

W. Ben McCartney

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

Date Written: May 2, 2019

Abstract

I create a novel person-level panel dataset to examine the effect of house price declines on voter participation. Using variation in house price falls during the recession, I find that a ten percent decline in home value decreased the average voter’s participation rate by two percent. Furthermore, I find no effect of house price declines on renters and, consistent with a financial distress channel, a particularly severe effect of house price declines on homeowners with little home equity. My results show that the financial health of the electorate affects the political process by decreasing voter participation among financially distressed households.

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

JEL Classification: D10, D72, H31, R20

Suggested Citation

McCartney, W. Ben, Does Household Finance Affect Elections? Evidence from a Housing Crisis (May 2, 2019). 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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