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Tony Cookson @profcookson.bsky.social · 29/03/2025

New working paper “Immigration and credit in America” with Ben Guttman-Kenney and Will Mullins. Abstract screenshot attached and download link available here: papers.ssrn.com/sol3/papers.... If you have thoughts, we would appreciate hearing them.

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Tony Cookson @profcookson.bsky.social · 31/12/2024

Nice discussion of results from my working paper with Emily Gallagher and Phil Mulder on Colorado Public Radio. www.cpr.org/2024/12/30/m... Crazy to think that the Marshall Fire was 3 years ago.

cpr.org

New research suggests nearly 75 percent of homeowners were underinsured immediately after the Marshall fire

Underinsured homeowners after the Marshall fire delayed rebuilding or opted to sell their homes, according to new research.

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Reposted by Tony Cookson

Emily Gallagher @profemily.bsky.social · 19/12/2024

Check out Tony's thread summarizing our new paper, which evaluates the drivers of underinsurance for total loss events like wildfires.

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Tony Cookson @profcookson.bsky.social · 17/12/2024

3 days until the submission deadline 🌟 The 2025 Boulder Summer Conference on Consumer Financial Decision Making!🌟 📅 May 28–30, 2025 | 📍 Boulder, CO cuboulder.qualtrics.com/jfe/form/SV_... If you haven't gone before, this is a **top tier** interdisciplinary conference in household finance.

cuboulder.qualtrics.com

2024 Online Boulder Summer Conference-Abstract Submission

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Tony Cookson @profcookson.bsky.social · 16/12/2024

There is more in the paper. Link (again): papers.ssrn.com/sol3/papers.... Again, this is our first release of the paper, so we're eager to improve it. If you have thoughts or comments, we're eager to learn from you.

papers.ssrn.com

Coverage Neglect in Homeowners Insurance

Most homeowners do not have enough insurance coverage to rebuild their house after a total loss. Using contract-level data from 24 homeowners insurance companie

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Tony Cookson @profcookson.bsky.social · 16/12/2024

The discrete choice model allows us to perform a counterfactual without coverage neglect -- i.e., what if consumers efficiently shopped by $/coverage? We estimate this would improve welfare by $290, on average, per year (or about 10% of annual premiums).

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Tony Cookson @profcookson.bsky.social · 16/12/2024

Why do consumers neglect coverage? 1) it is tough to know what total loss limit is "full" coverage (rebuild cost isn't home price). 2) even with dueling insurance quotes, it is tough to compare policies w different total loss limits. We think information provision could help.

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Tony Cookson @profcookson.bsky.social · 16/12/2024

And, that's what we find (see column 3): * Consumers respond significantly to lower headline premiums in their insurance choice. * They are less responsive (and in the opposite direction) to the $/coverage price schedule.

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Tony Cookson @profcookson.bsky.social · 16/12/2024

In the last part of the paper, we test for and quantify the coverage neglect mechanism using a discrete choice model. The idea is that a rational consumer would compare cost per coverage, but a coverage neglected one would only respond to headline premium.

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Tony Cookson @profcookson.bsky.social · 16/12/2024

Does underinsurance matter? Yes! For about 1000 total losses, we find that being more underinsured makes it less likely the household rebuilds and more likely they sell. Here, we're instrumenting for coverage choice using insurer average coverage ratio (leave one out).

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Tony Cookson @profcookson.bsky.social · 16/12/2024

What it is not 3: We find evidence against adverse selection on Wood Frame houses, which are *wayy* more likely to be a total loss, but are somehow not priced more expensively. Homeowners do not buy more coverage for such houses.

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Tony Cookson @profcookson.bsky.social · 16/12/2024

What it is not 2: Underinsurance is only weakly connected to having a mortgage or the mortgage's loan-to-value at the time of the fire.

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Tony Cookson @profcookson.bsky.social · 16/12/2024

What it is not 1: Underinsurance is *not* because policies get out of date. If anything, older policies are better insured. We can see this because we observe contracts at inception and as of the date of the Marshall Fire (Dec 31, 2021).

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Tony Cookson @profcookson.bsky.social · 16/12/2024

Finding 3: Underinsurance varies *a lot* across insurers operating in the same market, and policyholder characteristics do not explain this variation very much. The flip of this? Underinsured households could have gone with an insurer who would have provided fuller insurance.

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Tony Cookson @profcookson.bsky.social · 16/12/2024

Finding 2: Underinsurance is *pervasive* across household characteristics: income, credit score, and home value. High income folks are better insured. There's also a negative correlation to home values, but still most groups are underinsured.

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Tony Cookson @profcookson.bsky.social · 16/12/2024

So, what do we find? Finding 1: Underinsurance is *severe and common*... 75% of households are underinsured, and 37% are what we call *severely underinsured* -- i.e., only insured for 75% or less of their home's rebuild cost.

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Tony Cookson @profcookson.bsky.social · 16/12/2024

Our detailed data give a complete picture of underinsurance and recovery in the Colorado market. This allows us to: 1) measure extent of underinsurance, 2) understand how underinsurance ~ insurers versus household characteristics, 3) evaluate impact of underinsurance on recovery

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Tony Cookson @profcookson.bsky.social · 16/12/2024

Our paper relies on detailed insurance contract data, matched to household-level information from a major credit bureau, housing characteristics, and after a major wildfire, recovery outcomes. Because of that wildfire, we also have accurate rebuild cost estimates.

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Tony Cookson @profcookson.bsky.social · 16/12/2024

🚨 New working paper! 🦶 "Coverage neglect in homeowners insurance" with Emily Gallagher and Phil Mulder Link: papers.ssrn.com/sol3/papers.... We study the problem of why people underinsure against total losses, a pressing issue as climate events make these more common. #EconSky

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Quentin André @quentinandre.bsky.social · 11/12/2024

Have some cool financial decision-making research that you'd like to share with an awesome interdisciplinary audience of academics, practitioners, and policy-makers? Don't wait: Submission portal for the 2025 Boulder Summer Conference is now open! cuboulder.qualtrics.com/jfe/form/SV_...

cuboulder.qualtrics.com

2024 Online Boulder Summer Conference-Abstract Submission

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Tony Cookson @profcookson.bsky.social · 09/12/2024

Happy 20th Birthday, FRA! 2004-2024

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Tony Cookson @profcookson.bsky.social · 04/12/2024

I am super excited for the FRA this weekend (and honored to help put it together): fraconference.com/current-prog... One of my most favorite features is the early ideas session on Sunday afternoon. Always interesting & great interaction between authors and audience.

fraconference.com

Current Program – FRA

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Tony Cookson @profcookson.bsky.social · 21/11/2024

Happy to see my review paper, "Social Media and Finance" (with Will Mullins and Marina Niessner) published today at the Oxford Research Encyclopedia of Economics and Finance (oxfordre.com/economics/pa...). We learned a lot doing this review. Ungated version here: papers.ssrn.com/sol3/papers....

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Tony Cookson @profcookson.bsky.social · 17/11/2024

I had a great time at the OU-RFS Climate and Energy conference. www.ou.edu/content/dam/... I might be biased, but I think the paper I discussed on climate risks and underinsurance was the most interesting. Related, I’m eager to but cannot yet post my own underinsurance paper. Update soon.

ou.edu

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Tony Cookson @profcookson.bsky.social · 17/11/2024

🚨 RCFS Winter Conference 🚨 Escape winter in Puerto Rico + top-quality finance conference. sfs.org/rcfs-winter-... Deadlines Papers: Nov 18 Registered Reports on AI and measurement: Nov 25 Please submit your best work. I'm particularly excited to see the registered reports.

sfs.org

RCFS Winter Conference 2025 - - Society for Financial Studies

Feb 15-16, 2025 (Presidents’ Day weekend) Royal Sonesta, San Juan, Puerto Rico Call for Papers due November 18, 2024 Call for Registered Reports on "Understanding Firms, Finances and Households in the...

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Kristine Hankins @kwhankins.bsky.social · 07/11/2024

🚨Call for papers: JCF/Bocconi/@cepr.org Conference on 'Info, Contracts, and Firms' *Keynote: Mike Ewens *Featured Panel: 'The Changing Info Environment' w/ @profcookson.bsky.social, @israelsen.bsky.social, & Laurent Fresard *More to come! Deadline: Nov 18 www.neeley.tcu.edu/jcf-conferen...

neeley.tcu.edu

Journal of Corporate Finance Special Issue Conference 2025

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Tony Cookson @profcookson.bsky.social · 24/12/2023

Not that it doesn’t matter, but I’ve found students aren’t particularly attentive to the issue of which assignments generate the most variance. I also find that very different assessments have high correlations across sections, so as long as that’s true, it might not matter *as much* to scale.

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Tony Cookson @profcookson.bsky.social · 24/12/2023

Nothing like traveling with your family to reveal all the hidden airport norms that you take for granted.

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Kristine Hankins @kwhankins.bsky.social · 15/10/2023

Finance, Organizations, and Markets Conference sites.google.com/site/uscfom/... - @Yale this year - was terrific. Third time I've made the program in the last decade and it's always top-notch. Great to see @profcookson.bsky.social @paulgp.com @florianederer.bsky.social and more.

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