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Please use this identifier to cite or link to this item: http://arks.princeton.edu/ark:/88435/dsp012n49t4528
Title: The Housing Bubble: A Crash Course for Financial Literacy
Authors: Backer, Sarah
Advisors: Dinerstein, Michael
Department: Economics
Certificate Program: Finance Program
Class Year: 2019
Abstract: Financial literacy has the ability to affect people’s financial behaviors and outcomes, but little research exists on how naturally occurring economic events affect it. This paper views the 2008 housing crisis as a crash course for the American public that led to changes in its financial literacy levels. Using FINRA’s National Financial Capability Study and RealtyTrac’s foreclosure activity reports, this paper examines how foreclosures affected financial literacy from 2009-2015. Using OLS regressions, a link is established between rising foreclosures and positive changes in financial literacy. This effect nearly disappears at the end of the recession, thereby showing that changes occur during times of abnormal activity. Furthermore, effects vary based on home ownership and education level. Home owners and those who did not graduate high school show the largest effect sizes for these groups.
URI: http://arks.princeton.edu/ark:/88435/dsp012n49t4528
Type of Material: Princeton University Senior Theses
Language: en
Appears in Collections:Economics, 1927-2020

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