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New evidence of spillovers in personal bankruptcy using point-coded data

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  • Jess Grana
  • Mary Eschelbach Hansen

Abstract

Bankruptcy spillovers are said to occur when a household’s decision to file for bankruptcy is influenced by the filings of neighbours. This paper argues that spillovers are best captured by measuring the extent to which spatial and temporal lags of filings affect current filings in small geographical regions. It uses the geocoded exact addresses of all debtors who filed in the state of Maryland between 1949 and 1973. An additional bankruptcy last year increases bankruptcies this year by as much as 7%. The effect is largest for small distances and short lags. Moreover, close neighbours are more likely to share an attorney. These results suggest that interpersonal exchange of information is the dominant mechanism of transmission.

Suggested Citation

  • Jess Grana & Mary Eschelbach Hansen, 2019. "New evidence of spillovers in personal bankruptcy using point-coded data," Spatial Economic Analysis, Taylor & Francis Journals, vol. 14(4), pages 446-464, October.
    • Handle: RePEc:taf:specan:v:14:y:2019:i:4:p:446-464
    DOI: 10.1080/17421772.2019.1636128
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    Cited by:

    1. Laura Serra & Claudio Detotto & Pablo Juan & Marco Vannini, 2022. "Intersectoral and spatial spill-overs of firms’ bankruptcy in Spain," Letters in Spatial and Resource Sciences, Springer, vol. 15(2), pages 197-211, August.
    2. Megan Doherty Bea & K. Bley, 2022. "(Un)conditional consumer protections in high‐cost lending regulation: Impacts on local lending geographies," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(4), pages 1561-1596, December.

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