Search Results
Working Paper
Legal Institutions, Credit Markets, and Economic Activity
This paper provides novel evidence on the causal connections between legal institutions, credit markets, and real economic activity. Our analysis exploits an unexplored within-country setting?Native American reservations?together with quasi-experimental variation in legal contract enforcement wherein the US Congress externally assigned state courts to adjudicate contracts on a subset of reservations. According to area-specific data on small business credit, reservations assigned to state courts, which enforce contracts more predictably than tribal courts, have stronger credit markets. ...
Working Paper
Growing Up without Finance
Early-life exposure to local financial institutions increases household financial inclusion and leads to long-term improvements in consumer credit outcomes. We identify the effect of local financial markets using congressional legislation that led to large and unintended differences in financial market development across Native American reservations. Individuals who grow up on financially underdeveloped reservations enter formal credit markets later than individuals from financially developed reservations and have persistently worse consumer credit outcomes (10 point lower credit scores and a ...
Working Paper
Coverage Neglect in Homeowner's Insurance
Most homeowners do not have enough insurance coverage to rebuild their house after a total loss. Using contract-level data from 24 homeowner's insurance companies in Colorado, we show wide differences in average underinsurance across insurers that persist conditional on policyholder characteristics. Underinsurance matters for disaster recovery. Across households that lost homes to a major wildfire, each 10 percentage point increase in underinsurance reduces the likelihood of filing a rebuilding permit within a year of the fire by 4 percentage points. To understand why consumers purchase ...