Regional Variation in Bankruptcy Filing Rates

52 Pages Posted: 8 May 2006 Last revised: 5 Mar 2013

See all articles by Kelly D. Edmiston

Kelly D. Edmiston

Center for Insurance Policy & Research / NAIC; University of Kansas - School of Medicine; University of Missouri; Baker University

Date Written: November 1, 2005


Nonbusiness bankruptcy filing rates have increased very rapidly over the last couple of decades. In 1980, roughly 15 of every 10,000 Americans filed for bankruptcy protection. By 2004, that number had reached 54 of every 10,000 Americans. These alarming increases in bankruptcy filing rates over the last decade were largely the impetus for the Bankruptcy Abuse Prevention and Consumer Protection Act, which went into effect in October, 2005. A substantial literature already exists that seeks to determine the causes of personal bankruptcy, but critical holes in the literature remain. In particular, existing studies offer only weak inferences about the role of stigma in explaining the decision to file for bankruptcy or in explaining regional variation in bankruptcy filing rates. I enhance the existing literature by using innovative approaches to measuring the effects of age and geography, traditional proxies for stigma, and by utilizing a novel proxy for stigma, namely, religious adherence. There is also a lack of consensus on the effects of gambling on bankruptcy, with most research finding no statistically significant relationships. I utilize a unique measure of proximity to gambling establishments and subsequently find more definitive results. The existing literature lacks consensus on the effects of homestead exemptions as well, with some finding positive effects, some finding negative effects, and still others finding no effects. I assert that the explanation of these inconsistent results may lie in endogeneity, and therefore I estimate two-stage models that effectively instrument for homestead exemptions. In addition, I explore the effects on bankruptcy filing rates of factors generally left out of existing studies, including small business and self-employment, a full distribution of age and income, more narrow demographic definitions, disability, lack of health insurance, public assistance, housing and vehicle choices, and additional information on debts and debt service.

Keywords: bankruptcy, exemptions

JEL Classification: D1, R2

Suggested Citation

Edmiston, Kelly D., Regional Variation in Bankruptcy Filing Rates (November 1, 2005). Available at SSRN: or

Kelly D. Edmiston (Contact Author)

Center for Insurance Policy & Research / NAIC ( email )

1100 Walnut Street
Suite 1500
Kansas City, MO 641056
United States
8167838067 (Phone)

HOME PAGE: http://

University of Kansas - School of Medicine ( email )

3901 Rainbow Boulevard
Kansas City, KS 66160
United States

University of Missouri ( email )

Columbia, MO 65203
United States

Baker University ( email )

Baldwin City, KS
United States

HOME PAGE: http://

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics