Brian Bucks is a Senior Economist at the Bureau of Consumer Financial Protection (BCFP) and leads the Credit Information and Policy section. He has played a primary role in the BCFP’s survey data collection, including leading the design and analysis of the Survey of Consumer Views on Debt, the first nationally representative data on consumers’ experiences with debt collection. His research has examined household mobility; manufactured housing; income inequality; bankruptcy and financial vulnerability; borrowers’ knowledge of mortgage terms; and survey methods for measuring income and wealth. Between 2004 and 2011, Mr. Bucks worked on the Survey of Consumer Finances at the Federal Reserve Board.
This report presents the results of the Survey of Consumer Views on Debt (“survey”) which was conducted by the Consumer Financial Protection Bureau (“Bureau”) between December 2014 and March 2015. The survey results substantially expand the understanding of debt collection in the United States by providing the first comprehensive and nationally representative data on consumers’ experiences and preferences related to debt collection.[1]
A debt collector generally contacts a consumer when the collector believes that the consumer owes an unpaid debt. Debts for which a collection may be attempted can include both loans, such as a car loan or student loan, and past-due bills, such as a doctor’s bill or a phone bill. The collector may be the original creditor or another entity that is trying to collect the debt on behalf of the creditor, on behalf of a third party that has purchased the debt from the creditor, or on its own account as a purchaser of the debt obligation (collectively, debt collectors).[2]
The survey provides a more comprehensive picture of consumers’ experiences with debt collection than has been available from other data sources. Consumer complaint data, for example, reflect only the experiences of those consumers who contacted the Bureau or other governmental agencies and therefore may not be representative of consumers’ experiences generally. Administrative data from specific debt collection firms can provide detail that is helpful for understanding collection processes and practices of particular entities, including some of the larger firms engaged in debt collection. Information from firms, however, generally cannot provide a market-wide perspective or capture the consumer’s perspective, and it may not be representative of collections by firms of different sizes or debt types. In contrast, as described in Section 2, the Bureau’s survey sample was selected from credit records maintained by one of the top three nationwide credit repositories, and the survey data were adjusted for differences in response rates for different types of consumers. As a result, estimates from the survey are representative of U.S. consumers with a credit report.[3]…
[1] The Bureau released some preliminary findings from this survey in July 2016. See Appendix B of CFPB, “Small Business Review Panel for Debt Collector and Debt Buyer Rulemaking” (July 28, 2016), available at http://files.consumerfinance.gov/f/documents/20160727_cfpb_Outline_of_proposals.pdf. This report provides more detailed results.
[2] This report refers to third parties attempting to collect a debt as “debt collectors” and uses the term “creditor” to refer to first-party collectors, including lenders or billers to whom the consumer has an outstanding debt, regardless of whether that debt is a loan or a bill. This shorthand aligns with the wording of the survey, which defined a debt collector as “a person or company other than the creditor that tries to collect on a debt, such as an attorney, a debt collection firm, or other third party” and defined “creditor” to include both lenders and those seeking payment on a past-due bill.
[3] This report uses the term “consumer” for brevity, but because the sample was drawn from a random sample of consumer credit records from one nationwide credit repository, the sample and population are, more precisely, consumers with a credit record from that firm. Prior Bureau research indicates that one in ten adult Americans do not have a credit record.
Michaela Pagel is an Associate Professor (without tenure) at Columbia Business School. She received her Ph.D. from the Economics Department at UC Berkeley and works on topics in behavioral economics, household finance, and macroeconomics. Her dissertation focused on the consumption and investment implications of non-standard preferences. More specifically, she theoretically studied how decision-making is affected by people’s beliefs about their consumption. Her current work analyzes transaction-level data on income, spending, balances, credit limits, and logins stemming from a financial aggregation app. Furthermore, she is working with bank account data linked to individual investors’ security trades and portfolios.
We use transaction-level data of portfolio trades and holdings linked to checking, savings, and settlement account transactions and balances to explore how individuals respond to realized capital gains and losses. To identify the effects of realized gains and losses, we exploit plausibly exogenous mutual fund liquidations. Specifically, we estimate the marginal propensity to reinvest one dollar received from a forced sale event, when the investor either achieved a capital gain or a loss relative to his or her initial investment. Theoretically, if individuals held optimized portfolios, the marginal propensity to reinvest out of forced liquidations should be 100% independent of realizing a gain or a loss. Individuals should just reinvest all of their liquidity immediately into a fund with similar characteristics. Empirically, individuals keep a share of their newly found liquidity in cash, save it, consume it, or reinvest it into different funds, stocks, or bonds. Moreover, individuals reinvest 80% if the forced sale resulted in a capital gain, but only 40% in the event of a loss. Such differential treatment of gains and losses is inconsistent with active rebalancing or tax considerations, but consistent with mental accounting and the idea that individuals treat realized losses differently from paper losses providing evidence for realization utility and effects (Barberis and Xiong, 2012; Imas, 2016).
Arie Kapteyn Ph.D., is a Professor of Economics and the Executive Director of the Dornsife College of Letters Arts and Sciences Center for Economic and Social Research (CESR) at the University of Southern California. Before founding CESR at USC in 2013, Prof. Kapteyn was a Senior Economist and Director of the Labor & Population division of the RAND Corporation.
Much of Prof. Kapteyn’s recent applied work is in the field of aging and economic decision making, with papers on topics related to retirement, consumption and savings, pensions and Social Security, disability, economic well-being of the elderly, and portfolio choice. He is a pioneer in the development of new methods of data collection, using the Internet and mobile devices.
He has about 20 years of experience in recruiting and running population representative Internet panels, including the CentERpanel (2000 respondents; the first probability Internet panel in the world) and LISS panel (7500 respondents) in the Netherlands, as well as the American Life Panel (6000 respondents) and the Understanding America Study (4000 respondents currently, but growing to 6000 by early Fall 2016) in the US. He has conducted numerous experiments with the panels, concerning methods (e.g. optimal recruiting and survey design), substantive studies (including health and decision making), and measurement (self-administered biomarkers, physical activity, time use, weight and impedance measurement using advanced bathroom scales). Furthermore, he has been involved in telephone and in-person surveys on various continents.
Dr. Kapteyn received an M.A. in econometrics from Erasmus University Rotterdam, an MA in agricultural economics from Wageningen University, and a Ph.D. from Leiden University, all in the Netherlands. He is a fellow of the Econometric Society and holds a knighthood in the order of the Netherlands Lion.
This paper examines two behavioral factors that diminish people’s ability to value a lifetime income stream or annuity, drawing on a survey of about 4,000 adults in a U.S. nationally representative sample. Our first main finding is that experimentally increasing the complexity of the annuity choice reduces respondents’ ability to value the annuity. We measure lack of ability to value an annuity by the difference between the sell and buy values people assign to the annuity. Our second main result is that people’s ability to value an annuity increases when we experimentally induce them to think jointly about the annuitization decision and about the decision of how quickly or slowly to spend down assets in retirement. Accordingly, we conclude that narrow choice bracketing is an impediment to annuitization, yet the impediment can be lessened with a relatively straightforward intervention.
In this paper, we developed and evaluated “consequence messaging,” a behaviorally motivated communication strategy in which we used vignettes – video and written stories about hypothetical people – to explain the consequences of decisions. We studied two related areas where consequence messaging may improve understanding and decision-making: valuing annuities and Social Security claiming decisions. We evaluated the impact of consequence messaging by conducting a small-scale online study on a representative sample of about 650 Americans ages 50-60. We randomly assigned respondents to no vignette, a video vignette or a written vignette. Then, we assessed the impact on understanding and decision-making through a survey. We assessed understanding by asking factual questions, and assessed decision-making by asking respondents to provide advice to a hypothetical person facing various decisions about annuities and Social Security claiming. The vignettes improved understanding and decision-making for both valuing annuities and Social Security claiming decisions. The effect sizes were not significantly different across written vignettes versus video vignettes. The vignettes did not have a statistically significant effect on how respondents rated the importance of concerns related to retirement.
Brad Barber is the Gallagher Professor of Finance at the Graduate School of Management, UC Davis.
Professor Barber has been recognized as one of the fifty most-cited financial economists in the world (ranking 38th in one citation survey). See Professor Barber’s Google Scholar page for links to his research. Professor Barber is the President of the Financial Management Association. He was Principal Investigator for the CalPERS Sustainable Research Initiative (SIRI), founder of the annual Napa Conference on Financial Markets Research, and the finance department editor for Management Science from 2009-2012.
Professor Barber’s current research focuses on asset pricing, behavioral finance, and gender. He has written numerous scholarly articles, which have appeared in top academic publications including the Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Journal of Political Economy, Quarterly Journal of Economics, American Sociological Review, Journal of Financial and Quantitative Analysis, and the Financial Analyst Journal. His research has been covered extensively in the financial press, including Business Week, Time, The Wall Street Journal, ABC News, NBC Nightly News, CNN, CNNfn, and CNBC.
Professor Barber received his Ph.D. in finance from the University of Chicago in 1991. He also received an MBA from the University of Chicago and a B.S. in Economics from the University of Illinois.
We show parental careers differentially affect the future career choices of girls and boys using survey data from CFA Institute members. Among CFA Institute members, women are more likely to have a STEM parent (particularly a STEM mother) than men. Relative to the base rates at which girls and boys become CFA Institute members, STEM mothers increase the girls’ rate by 48% more than the boys’ rate; STEM fathers increase the girls’ rate 29% more than the boys’ rate. Our findings are consistent with the hypothesis that early role models, particularly female role models, influence women’s choice of finance careers.
We show the math gender gap is related to women’s career outcomes using international geographic data on the investment profession, a math-intensive and 80% male profession. The math gender gap predicts the percentage of women investment professionals across countries and across states. Female labor force participation, gender inequality measures, and competition attitudes do not diminish the economic significance of the math gender gap as a predictor of women’s career outcomes. Our results suggest other societal factors exist that either directly affect the math training of women or jointly affect the math gender gap and women’s career outcomes.
Héctor L. Ortiz, Ph.D. is Senior Policy Analyst at the Bureau of Consumer Financial Protection’s Office for Older Americans where he leads the office research on financial literacy, retirement security and elder financial exploitation. Previously, Mr. Ortiz worked at the Center for Benefits of the National Council on Aging, where he managed research and program evaluation on public benefits outreach and enrollment initiatives targeted at low-income seniors. He is a member of the National Academy of Social Insurance. Mr. Ortiz holds a Ph.D. in Political Science from the Maxwell School of Citizenship and Public Affairs of Syracuse University.
Since 2012, the Bureau of Consumer Financial Protection (the Bureau) has undertaken foundational research to understand what contributes to people’s financial well-being. In the first stage of this work, the Bureau developed a consumer-derived definition of financial well-being and a way to measure it.1 Using input from consumers and experts in financial education, the Bureau also formulated hypotheses about the association between financial well-being and financial capability factors such as financial knowledge, skills, and attitudes. The Bureau then fielded a national survey to test these hypotheses and conducted a study based on the survey results through Abt Associates.2 This brief summarizes findings from Abt’s technical report, “Understanding the Pathways to Financial Well-Being,” and examines the implications for the role of financial education in improving peoples’ financial well-being.
Verónica Frisancho is a senior research economist in the Research Department of the Inter-American Development Bank. She received her Ph.D. in Economics from Pennsylvania State University in 2012, and she holds a bachelor’s degree in Economics from the Universidad del Pacífico in Lima, Peru.
Verónica’s work can best be described as applied microeconomics, and her main field of specialization is Development. Her research in these areas includes an emphasis on education, labor markets in developing countries, and financial inclusion.
Using data from a randomized controlled trial in 300 public high schools in Peru, this paper studies the potential of school-based financial education programs for youth. The intervention improves students’ and teachers’ financial knowledge by 0.14 SD and 0.32 SD, respectively. The impact of the intervention also extends to socioemotional traits and behavior, as sizable positive impacts on self-control and consumption habits among students are identified. Teachers in the treatment group become more impulsive and risk averse, and they are more likely to save (9 percentage points) and to save formally (14 percentage points).
George Washington University School of Business
Duquès Hall, Minerva
George Washington University School of Business
Duquès Hall, Minerva
George Washington University School of Business
Duquès Hall, Minerva
The George Washington University
Science and Engineering Hall, B1270
George Washington University School of Business
Duquès Hall, Minerva Room (451)
The George Washington University
Science and Engineering Hall, B1270