Economic Commentary 2016-13, Federal Reserve Bank of Cleveland
Geographic Mobility and Consumer Financial Health: Evidence from Oil Production Boom Towns
Abstract. One way a household might handle financial distress is to relocate to another area that offers greater income opportunities. This article examines the impact of geographic mobility on consumer finances by focusing on the residents of “boom towns” — areas that saw a surge of growth in oil-drilling activity around 2010 and a bust thereafter. We find that residents who move after the bust experience stronger consumer financial health than residents who stay put.
Keywords: geographic mobility, consumer financial health, oil boom, credit utilization, delinquency, Consumer Credit Panel.
In brief
Residents who leave oil boom towns after the bust have stronger consumer financial health than those who stay.
Using the New York Fed Consumer Credit Panel, the commentary follows residents of areas that saw a surge in oil drilling around 2010 and a bust afterward. Those who relocate after the bust have lower credit utilization, fewer delinquent accounts, and more new credit than those who stay.
Read and cite
- Read the commentary, Federal Reserve Bank of Cleveland
Heimer, Rawley Z., Timothy Stehulak, and Caitlin Treanor. 2016. “Geographic Mobility and Consumer Financial Health: Evidence from Oil Production Boom Towns.” Economic Commentary 2016-13, Federal Reserve Bank of Cleveland.
@techreport{heimer2016mobility,
author = {Heimer, Rawley Z. and Stehulak, Timothy and Treanor, Caitlin},
title = {Geographic Mobility and Consumer Financial Health: Evidence from Oil Production Boom Towns},
institution = {Federal Reserve Bank of Cleveland},
type = {Economic Commentary},
number = {2016-13},
year = {2016},
url = {https://www.clevelandfed.org/publications/economic-commentary/2016/ec-201613-geographic-mobility-and-consumer-financial-health-oil-boom-towns}
}
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