Finance Seminar

Thursday March 14, 2019 4:00 PM

Spillover Effects of the Opioid Epidemic on Consumer Finance

Speaker: Mark Jansen, Eccles School of Business, University of Utah
Location: Baxter B125

Abstract: I examine the impact of the opioid epidemic on subprime auto lending. Using a difference-in-differences framework, I find that a 10% increase in county-level opioid abuse causes a 2.9% increase in loan defaults. Moreover, the resulting higher default rates and weaker predictive performance of traditional credit measures (e.g., FICO score) generates a negative externality for borrowers in opioid-afflicted areas. In these areas, loan costs for subprime borrowers are 4.4% higher.

Finance Seminars at Caltech are funded through the generous support of The Ronald and Maxine Linde Institute of Economic and Management Sciences (lindeinstitute.caltech.edu).

Series Finance Seminar Series

Contact: Sabrina Hameister at 626-395-4228 sabrina@hss.caltech.edu
For more information visit: http://bit.ly/2UK7EPH