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Does Household Finance Affect the Political Process? Evidence from Voter Turnout During a Housing Crisis
[Loan originations and defaults in the mortgage crisis: The role of the middle class]

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  • W Ben McCartney

Abstract

I examine the effect of house price declines on voter participation using a novel person-level panel data set. Contrary to what the “angry voter hypothesis” predicts, I find that a 10% 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.

Suggested Citation

  • W Ben McCartney, 2021. "Does Household Finance Affect the Political Process? Evidence from Voter Turnout During a Housing Crisis [Loan originations and defaults in the mortgage crisis: The role of the middle class]," The Review of Financial Studies, Society for Financial Studies, vol. 34(2), pages 949-984.
    • Handle: RePEc:oup:rfinst:v:34:y:2021:i:2:p:949-984.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhaa064
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    Cited by:

    1. Sara M. Constantino & Alicia D. Cooperman & Thiago M. Q. Moreira, 2021. "Voting in a global pandemic: Assessing dueling influences of Covid‐19 on turnout," Social Science Quarterly, Southwestern Social Science Association, vol. 102(5), pages 2210-2235, September.

    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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