On the Need for Financial Epidemiology

Abstract

As economic conditions decline, U.S. households continue to be pushed towards the brink of financial insolvency. Unfortunately, current legal and market protection policies are largely ex post, and do little to alleviate financial distress until after insolvency occurs. This paper argues that such policies are inherently flawed. Instead, policies should be designed using an ecological approach to household decision making, and interventions based on those policies should be primarily preventive in nature. Household financial conditions must be closely monitored at the individual, community and population levels using rigorous empirical methods by organizations that have a vested interest in preserving household financial stability. Overall, these ends can be met by adapting epidemiological, and more broadly public health, frameworks into the current legal and market protection initiatives.