Research Paper: Local Conditions and Debt in Collections

Christopher Trepel, in partnership with the Urban Institute and Encore Capital Group, recently published a report on consumer indebtedness:

Delinquent debt in the United States is an important concern for both researchers and policymakers, yet little is known about which localities in the country are most affected by, and which local characteristics are most associated with, financial distress. This paper begins to bridge this gap by using unique credit bureau data to examine the geographic distribution of debt in collections in the United States and, merged with local-level data, identify the characteristics of neighborhoods (census tracts) with high debt in collections. In doing so, we answer the following research questions:

1. How is debt in collections geographically distributed across the United States, and which areas have the highest concentration of debt in collections?

2. Which neighborhood characteristics are associated with debt in collections? How do local-area health insurance coverage, housing market conditions, labor market conditions, and socioeconomic characteristics relate to individuals’ financial distress, as measured by debt in collections?

Go here to read the full report.