Using individual-level panel data, this paper examines the relationship between problem debt and psychological health. Individuals exhibiting problems repaying their debt obligations also exhibit much worse psychological health, by either subjective or objective measures. However, selection into...

We utilise questions concerning individual ‘debt literacy' incorporated into market research data on households' unsecured debt positions to examine the association between consumer credit and individual financial literacy. We examine the relationship between individual responses to debt...

Home equity has a strong impact on individual health. In UK household panel data home equity lowers the likelihood of home owners exhibiting a broad range of medical conditions. This is due to increased use of private health care, reduced hours of work and increased exercise. Home equity, unlike...

We use the Panel Study of Income Dynamics (PSID), a longitudinal study of a representative sample of the US population, to examine social rank effects on the relationship between life satisfaction and economic status. We examine the effects of income, home values, mortgage debts, financial...

We explore how households insure themselves against consumption volatility. We asked households how they would fund an unexpected emergency consumption expense equivalent to one month's income. Answers reveal a range of consumption insurance mechanisms, including borrowing from credit markets...

Using detailed and highly-disaggregated data on spending, income, bank account balances, and consumer credit, we examine the tendency of individuals to “co-hold”, i.e., to simultaneously hold low-interest liquid deposit balances and high-interest debt in the form of overdrafts. The...

We explore the effects of round number preferences in credit card payments. Payments at round numbers are very common: 70% of manual non-full credit card payments are at round numbers. Using minimum payment amounts as a natural experiment for the lower bound on payments, we show stickiness in...

Attention utility is the hedonic pleasure or pain derived purely from paying attention to information. Using data on brokerage account logins by individual investors, we show that individuals devote disproportionate attention to already-known positive information about the performance of...

Attention utility is the hedonic pleasure or pain derived purely from paying attention to information, and is distinct from the 'news utility' that arises from gaining new information. Using data on brokerage account logins by individual investors, we show that individuals devote...

Many studies have estimated the relationship between income and well-being. However, economic theory predicts that well-being derives from consumption, not income. Using newly available US micro-level panel data, we show that consumption has much larger effects on life satisfaction than does...