Does Household Finance Affect the Political Process? Evidence from Voter Turnout During a Housing Crisis
63 Pages Posted: 14 Nov 2017 Last revised: 21 Apr 2020
Date Written: February 10, 2020
I examine the effect of house price declines on voter participation using a novel person-level panel dataset. Contrary to what the “angry voter hypothesis” predicts, I find that a ten percent decline in local house prices decreases the participation rate of the average mortgaged homeowner by 1.6 percentage points. Consistent with a financial distress channel, house price declines have no effects on renters and particularly severe effects on highly leveraged households. My findings are consistent with the existence of a feedback loop between financial distress and inequality operating through voter participation.
Keywords: Household Finance, Financial Distress, Mortgages, Voter Participation, Elections
JEL Classification: D10, D72, H31, R20
Suggested Citation: Suggested Citation