Work

Income and Health Care Consumption: Evidence From Mortgage Payment Shocks

Year: 2025

Type: article

Abstract: During the Great Recession, monetary stimulus had asymmetric impacts on mortgages with different interest rate structures, leading to a significant and unexpected reduction in mortgage payments for adjustable-rate mortgage (ARM) borrowers, which in turn increased their disposable income. Leveraging this quasi-experimental setup, our analysis reveals that healthcare expenditures and medical service utilization increased in counties with a higher prevalence of ARMs. The heterogeneity between ARM and fixed-rate mortgage (FRM) borrowers, combined with the more pronounced economic decline observed in counties densely populated with ARMs, allows our study to provide conservative lower bound estimates of the effects of income shocks on household healthcare consumption.

Source: Health Economics

DOI: 10.1002/hec.70009

Authors: Hong Lee, Deokrye Baek, Joseph R. Mason

Institutions: Wright State University, University of Dayton, Louisiana State University

Language: English

Topic: Healthcare Policy and Management

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Reduced inequalities, No poverty, Good health and well-being

Open Access status: hybrid

Estimated APC paid: $4,050