Does Household Finance Affect Elections? Evidence from a Housing Crisis
49 Pages Posted: 14 Nov 2017 Last revised: 7 May 2019
Date Written: May 2, 2019
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: Suggested Citation