Essays on Household Finances, Consumption & Individual Mental Health

Chapter I: We exploit the spatial and temporal variation of the staggered introduction of interstate banking deregulation across the U.S. to study the relationship between credit constraints and consumption of durables. Using the American Housing Survey from 1981 to 1989, we link the timing of these reforms with evidence of a credit expansion and household responses on many margins. We find evidence that low-income households are more likely to purchase new appliances after the deregulation. These durable goods allowed households to consume less natural gas and spend less time in domestic activities after the reforms. Chapter II: We explore the effects of hydraulic fracking booms on individual mental health by exploiting geological variation across U.S. shale plays. Utilizing a difference-in-differences specification to infer mental health outcomes, we find evidence that fracking leads to general declines in mental wellbeing. Coefficient results associated with depression, bad mental days, and above average bad days are positive and robust, indicating a negative impact of the boom-and-bust cyclical natural on mental health for an entire population. We also find some evidence suggesting individuals are more prone to alcohol abuse following a fracking boom. Estimating the heterogeneous treatment effects of subgroups within our sample pool, we shed some light on which demographics are more susceptible to experienced worsened mental health conditions spurred by the implementation of intense local fracking. Effects are largest and most consistent for those who self-reported as: (i) married, widowed, or single (associated with marital status); (ii) unemployed, a homemaker, or a student (associated with employment status), and (iii) female (relative to male counterparts). Chapter III: Literature investigating the impact of credit constraints on durable good consumption has been expanding rapidly. This paper looks at the elimination of auto loan cramdowns for Chapter 13 bankruptcy proceedings on three outcomes related to automobiles: asset value over time, number of autos in the household, and loan-to-value (LTV) ratio of new autos. Using a difference-in-differences framework based on a state's historical use of Chapter 13 bankruptcy, we show that moneylenders increase lending to households as a result of lower credit risk following the reform. Further, as a proxy measurement for discrimination, we add wealth and race interactions to our main model and find positive, robust treatment effects of cramdown elimination on autos for low-asset and Black or African American households. Together, these results may indicate that lower risk to lenders leads to more lending across society in terms of equity, inclusion, and diversity.