Partially Disaggregated Household‐Level Debt Service Ratios: Construction, Validation, and Relationship to Bankruptcy Rates

22 Pages Posted: 6 May 2020

See all articles by Joel Elvery

Joel Elvery

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Mark Schweitzer

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Date Written: January 2020

Abstract

Using individual‐level debt payments data from a credit bureau, we estimate debt service ratios by debt type for the United States. While highly correlated with the Board of Governors' national debt service ratio, we identify some required payments categories that vary substantively from the aggregate assumptions used in the Board's published data series. Estimating novel state and metropolitan statistical area (MSA)‐level debt service ratios, we show that debt service ratios rose dramatically during the 2000s housing boom in several of the most impacted states and MSAs. Our state‐level debt service ratios are shown to be useful in predicting state bankruptcy rates.

JEL Classification: D14, C8, E50

Suggested Citation

Elvery, Joel and Schweitzer, Mark, Partially Disaggregated Household‐Level Debt Service Ratios: Construction, Validation, and Relationship to Bankruptcy Rates (January 2020). Contemporary Economic Policy, Vol. 38, Issue 1, pp. 166-187, 2020, Available at SSRN: https://ssrn.com/abstract=3593677 or http://dx.doi.org/10.1111/coep.12434

Joel Elvery (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

Mark Schweitzer

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

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