Research

Extreme Spending – Not Dire Straits – Fuel Personal Bankruptcies

Household bankruptcy filings have spiked over the past two decades. According to the American Bankruptcy Institute, 412,510 personal bankruptcies were filed in 1985 compared to 2,039,214 in 2005. During that period, personal bankruptcies rose from 0.3 percent to 1.8 percent of all U.S. households. Bank and credit card companies have reportedly lost tens of billions of dollars every year as a consequence of the upward trend in consumer bankruptcy filings. The ripple effect of the current credit crisis continues fuel filings. But what else is pushing families to the economic brink? Why have personal bankruptcies skyrocketed in the 2000s versus the 1980s (during which time the U.S. experienced a full blown recession)? Assistant Professor Ning Zhu has tackled these questions in his working paper, “Household Consumption and Personal Bankruptcy,” which is based on an analysis all personal bankruptcy filings in Delaware in 2003. Zhu also collected data from the Federal Reserve Board’s Survey of Consumer Finance (SCF), which asks respondents nationwide about household consumption and whether they have ever filed for bankruptcy. Zhu used the SCF’s data to compare the spending patterns of households that filed bankruptcy to those which had not. He found that credit card debt and spending on durable goods, such as housing and automobiles, spur the greatest number of bankruptcy filings. While unexpected medical expenses have an impact on households, Zhu found it only accounts for five percent of bankruptcies. Similarly, unemployment leads to only 13 percent of bankruptcies. He discovered that even though the households that filed bankruptcy tended to have less income than those households that did not file bankruptcy, their consumption patterns appeared to be the same or more extreme. Zhu concluded that the households with greater consumption debt are more likely to file under Chapter 7, enabling them to walk away from those liabilities. He argues for bankruptcy law reform that reserves Chapter 7 bankruptcy filings to households impacted by unexpected medical costs or unemployment, not overconsumption. Zhu presented the paper at Yale University’s Behavioral Finance Conference last May.

Most recently, Zhu won the best paper award at the Cass School of Business’s second annual Emerging Markets Group Conference on Emerging Markets Finance in London on May 15-16, where he presented his study, “Does Bank Ownership Increase Value: Evidence from China.” The conference was co-sponsored by the International Monetary Fund.

Zhu to Head Quant Strategies at Lehman Brothers Asia

In July, Zhu will be promoted to associate professor and will begin a year-long sabbatical to serve as head of quantitative strategies for Lehman Brothers (Asia) in Hong Kong. At the multi-national investment bank, his role will include developing quantitative strategies and investment models for Lehman’s internal proprietary trading desk and for large local clients such as sovereign, mutual and hedge funds.

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News Release

UC Davis Part-Time MBA Ranked in Nation’s Top 9%
Fourth Consecutive Year among U.S News & World Report's Premier Programs

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(Davis, CA) — The UC Davis Part-Time MBA program offered in Sacramento and the San Francisco Bay Area is ranked among the top 9% in the U.S., according to U.S. News & World Report’s latest graduate business school rankings.

At No. 29, this is the fourth consecutive year the UC Davis Part-Time MBA program is among the top AACSB International-accredited part-time MBA programs surveyed. This year, there were 323 part-time MBA programs surveyed.

News Release

UC Davis Full-Time MBA Ranked among Nation’s Premier Programs for 20th Consecutive Year
MBA Programs among Top 10% in U.S.
Record Salary and Bonus

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(Davis, CA) — The UC Davis Graduate School of Management’s Full-Time MBA program is ranked among the premier business schools in the nation for the 20th consecutive year, according to U.S. News & World Report’s latest graduate business school rankings released today.

U.S. News’ latest ranking places the Full-Time MBA program at No. 48, placing it among the top 10% of the 464 Association to Advance Collegiate Schools of Business International’s accredited full-time MBA programs surveyed.

Key statistics from the School’s Full-Time MBA ranking include:

News Release

UC Davis Graduate School of Management partners with Lawrence Livermore and Sandia National Labs to drive technologies from lab to market

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(Davis, Calif.) – With a joint goal of speeding the transfer of new technologies from the laboratory to the commercial marketplace, the UC Davis Graduate School of Management, Lawrence Livermore National Laboratory and Sandia National Laboratories have announced a new partnership for researchers to develop their entrepreneurial skills.

Spotlight Story

Vickie Sherman MBA 13 Finds Her Passion, Her Career—and Herself

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What opportunities, decisions, events have shaped your professional life?

My career path has been a climb across a jungle gym rather than a tangent up a corporate ladder. As a child, I used to thumb through the three-inch JCPenney catalogue, picking out the professional women who I would grow to be. I wanted to rule the world from a corner office in a suit and heels. I wanted to shed my humble origins and become Corporate Barbie.

Spotlight Story

MBA Student Consultants Make an IMPACT
Projects Put Business Needs Front and Center

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Agilent Technologies’ Electronic Measurement Group is a $3.6 billion business that over the past decade has seen a dramatic shift in its customer base from U.S., and Western European customers to predominantly Asia-based customers. Today, the majority of the division’s revenues are generated outside of the U.S., with an increasing concentration in China.