Residential Migration, Entry, and Exit as Seen Through the Lens of Credit Bureau Data

FRB of Philadelphia - Community Development Studies and Education Discussion Paper No. 13-01

FRB of Philadelphia - Payment Cards Center Discussion Paper No. 13-04

36 Pages Posted: 11 Dec 2013 Last revised: 12 Dec 2013

See all articles by Keith Wardrip

Keith Wardrip

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Robert M. Hunt

Consumer Finance Institute, Federal Reserve Bank of Philadelphia

Date Written: December 1, 2013

Abstract

We analyze a large, nationally representative anonymized data set of consumers with a credit report from 2002 to 2010. This is a period that encompasses a boom and bust in consumer credit. Using census data, we classify consumers into four categories of relative neighborhood income and find that, over time, the number and proportion of consumers with a credit report fell in low- and moderate-income neighborhoods and rose in higher-income neighborhoods. Population trends evident from census data explain only a portion of these changes in the location of the credit bureau population. In most instances, the primary driver reflects residential migration from relatively poorer neighborhoods to ones with relatively higher incomes. Patterns of entry into or exit from the credit bureau population were correlated with the credit cycle, as well as with relative neighborhood income, resulting in slower sample growth in low- and moderate-income neighborhoods during periods of credit contraction. These results are interesting in themselves, but they are also important for interpreting empirical results estimated from credit bureau data.

Keywords: Migration, Low-income neighborhoods, Moderate-income neighborhoods, Credit bureau data

JEL Classification: D14, J6, R23

Suggested Citation

Wardrip, Keith and Hunt, Robert M., Residential Migration, Entry, and Exit as Seen Through the Lens of Credit Bureau Data (December 1, 2013). FRB of Philadelphia - Community Development Studies and Education Discussion Paper No. 13-01, FRB of Philadelphia - Payment Cards Center Discussion Paper No. 13-04 , Available at SSRN: https://ssrn.com/abstract=2365794 or http://dx.doi.org/10.2139/ssrn.2365794

Keith Wardrip (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Robert M. Hunt

Consumer Finance Institute, Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States
215-574-3806 (Phone)
215-574-7101 (Fax)

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