The JPMorgan Chase Institute is focused on conducting original research, developing expert insights, framing critical economic problems, and convening policymakers, business leaders, and other decision makers to consider the most pressing economic issues.
The research agenda of the Institute extends across the portfolio of JPMorgan Chase’s lines of business and global reach. The Institute focuses its analyses on consumer finance and financial health, businesses large and small, financial markets, and other critical economic topics. Our timely data, combined with expert insights, are unique resources the JPMorgan Chase Institute will use to provide a comprehensive perspective on the complex inner workings of the economy to help policymakers, businesses, and nonprofit leaders make smarter decisions to advance global prosperity.
Student Loan Payments
Evidence from 4 Million Families
With this report, the JPMorgan Chase Institute aims to describe how student loan payments fit into the context of families’ larger financial lives. We offer the debate insight into a new, high-frequency cash flow perspective on student loan payments and how they relate to a family’s income, liquid assets, spending, and other debt payments and seek to answer five key questions:
- What share of take-home income are families spending on student loan payments?
- How does the financial burden of student loan payments differ across demographic groups?
- How consistently do families repay student loans, and how volatile are repayment amounts?
- In what ways do student loan payments differ from other types of loan payments, notably auto loan and mortgage payments?
- How do student loan payments fluctuate with income, liquid assets, and expenditures?
See the Findings in the report “Student Loan Payments”
Trading Equity for Liquidity
Bank Data on the Relationship Between Liquidity and Mortgage Default
For many families, homeownership is a vital part of the American dream. Often, their mortgage will be their greatest debt and their mortgage payment will be their largest recurring monthly expense. This report aims to answer important questions about the role of liquidity, equity, income levels, and payment burden as determinants of mortgage default using a unique data set of JPMorgan Chase customers with a Chase mortgage and Chase deposit accounts. Our analysis suggests that liquidity may have been a more important predictor of mortgage default than equity, income level, or payment burden. Trading equity for liquidity at origination by making a slightly smaller down payment and holding the residual cash in an “emergency mortgage reserve” account may lead to lower default rates. A policy or pilot program could test the impact of this trade-off and, if impactful and cost-effective, the program could serve as an alternative to underwriting standards based on meeting a total debt-to-income (DTI) threshold at origination.
See the Findings in the report “Trading Equity for Liquidity”
How Families Manage Tax Refunds and Payments
In previous JPMorgan Chase Institute research, we reported that out-of-pocket spending on healthcare services jumps by 60 percent in the week a tax refund is received and remains elevated for 75 days. This report builds on that research, investigating more comprehensively how families manage the positive cash flow from tax refunds and negative cash flow from tax payments. We analyze daily financial flows and balances for one million families who receive tax refunds or make tax payments, and find that tax reconciliation has a significant and long-lasting impact on spending and saving patterns of some, but not all of them.
See the Findings in the report “Tax Time: How Families Manage Tax Refunds and Payments”
Gender, Age, and Small Business Financial Outcomes
Leveraging high-frequency transaction data from a sample of 1.3 million small operating businesses, this new research from the JPMorgan Chase Institute focuses on small business financial performance, with specific emphasis on differences in outcomes by owner age and gender. Our unique data illustrates the wide diversity among small business owners, providing insights into small business financial health and performance, including survival, cash liquidity, revenues, and revenue growth.
See the Findings in the report “Gender, Age, and Small Business Financial Outcomes”
Shopping, Near and Far
Local Commerce in the Digital Age
Over the past decade, rapid urbanization, combined with the advent of online commerce, has made it more difficult to understand dynamics of the modern American economy, especially at the local level. The sustained shift in many product markets from traditional brick-and-mortar stores toward online merchants and the impact of that shift on consumers and merchants requires high-frequency economic measurement and analysis.
For this study, we expanded the JPMorgan Chase Institute’s lens on local commerce, leveraging 4 billion credit and debit card transactions from nearly 7.7 million customers to provide an unprecedented view of the online economy in the US. This study anchors on the location of the consumer and allows us to better understand online commerce and how it has grown, who has driven that growth, and how it has impacted brick-and-mortar merchants.
See the Findings in the report “Shopping, Near and Far”
On the Rise
Out-of-Pocket Healthcare Spending in 2017
Leveraging financial transaction data, we provide a unique cash flow view of families’ healthcare out-of-pocket spending (HOSP) and burden. In 2017, we released the first estimates of out-of-pocket healthcare spending levels and burden at the state of country level from 2013 to 2016. In this report, we describe the enhancements to, and key findings from, the updated JPMCI HOSP data asset that includes the first available estimates of 2017 healthcare out-of-pocket spending trends, as well as a first-ever look at year-over-year trends at the state and county level for different demographic groups.
See the Findings in the report “On the Rise: Out-of-Pocket Healthcare Spending in 2017”
The Online Platform Economy in 2018
Drivers, Workers, Sellers, and Lessors
Technological innovation is transforming economic exchange. Just a decade ago, the Online Platform Economy comprised a handful of marketplaces connecting independent sellers to buyers of physical goods. Today, platforms connect drivers to passengers, property owners to renters, and artisans to customers, among many other transactions. Relying on platforms to access almost any kind of good or service from some independent supplier has become a routine part of daily life for many consumers. Have these innovations created viable new options for making a living?
In this report, we extend the JPMorgan Chase Institute Online Platform Economy dataset series through March 2018, as well as expand the sample to 39 million unique account holders and 128 platforms. We track 38 million payments directed through these platforms to 2.3 million Chase account holders. Our analysis allows us to document the growth of platform earnings and participation, ultimately offering new insights about supply-side participation in the Online Platform Economy.
See the Findings in the report “The Online Platform Economy in 2018”
Growth, Vitality, and Cash Flows
High-Frequency Evidence from 1 Million Small Businesses
The small business sector makes important contributions to overall US economic growth, but the individual small businesses that comprise the sector are heterogeneous and face fundamentally different liquidity and cash flow management challenges as they attempt to survive and grow. This report by the JPMorgan Chase Institute introduces a newly augmented small business data asset to empirically address these questions. We built a sample of 1.3 million de-identified small businesses with Chase Business Banking accounts active between October 2012 and February 2018. The over 3.1 billion transactions we analyze from these businesses provide a novel view of daily revenues, expenses, and financing cash flows for individual small business. Our analyses shed light on the ways in which different segments of the sector contribute to the US economy, and how small businesses manage cash flows as they grow.
See the Findings in the report “Growth, Vitality, and Cash Flows”
FX Markets Move on Surprise News
Institutional Investor Trading Behavior around Brexit, the US Election, and the Swiss Franc Floor
This JPMorgan Chase Institute report is our first study based on a new, proprietary data asset composed of institutional investor transactions. We explore trading around three recent events that led to the largest one-day moves in the relevant currencies in the last 20 years: the Brexit referendum, the 2016 presidential election, and the decision by the Swiss National Bank (SNB) to remove the Swiss Franc floor. The granularity of our transaction data allows us to provide an inside look at the trading behavior of various types of institutional investors during these three major market events and spotlight which investor sectors transferred risk during the price discovery process and which sectors waited until exchange rates had stabilized to transfer risk.
View Our Research “about how FX Markets Move on Surprise News”
Mortgage Modifications after the Great Recession
New Evidence and Implications for Policy
The aftermath of the Great Recession was a particularly difficult period for many homeowners. Unemployment increased and house prices declined, leaving many homeowners struggling to make their monthly mortgage payments and unable to sell their homes. In this report, the JPMorgan Chase Institute used data on mortgage modifications to measure the impact of reductions in monthly mortgage payments and mortgage principal on default and consumption. We found that payment reduction was effective in reducing default while principal reduction had no impact on default or consumption, and default was correlated with a considerable loss in income. Our analysis suggests that mortgage modification programs that are designed to target substantial payment reduction will be most effective at reducing mortgage default rates. Modification programs designed to reach affordability targets based on debt-to-income measures without regard to payment reduction or target a
specific LTV ratio while leaving borrowers underwater may be less effective at reducing defaults.
See the Findings “Mortgage Modifications after the Great Recession: New Evidence and Implications for Policy”
The Healthcare Spending of 2 Million US Families
The future of family-paid healthcare costs rests with healthcare policy choices currently being debated and out-of-pocket costs are a key piece of that picture. The JPMorgan Chase Institute set out to better understand out-of-pocket healthcare spending among US households. Building off a sample of 2.3 million de-identified core Chase customers aged 18 to 64 between 2013 and 2016, we created the JPMorgan Chase Institute Healthcare Out-of-pocket Spending Panel (JPMCI HOSP). We explored the levels, concentration, and growth of out-of-pocket healthcare spending and the implications of these spending trends for overall household financial health. The JPMCI HOSP provides a first-ever look into out-of-pocket healthcare spending for households on a month-to-month basis, at the state, metro, and county level, and as recent as 2016. In this report, we describe the creation of, and initial insights gleaned from, this new data asset.
See the Findings “Paying Out-of-Pocket: The Healthcare Spending of 2 Million US Families”
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The Consumer Spending Response to Mortgage Resets
Microdata on Monetary Policy
The Great Recession brought to the forefront many unanswered questions about how monetary policy plays out at a microeconomic level, notably the question of how changes in the federal funds target rate impact personal consumption for individual households. In this report, the JPMorgan Chase Institute examines the credit card spending of a sample of US homeowners with an adjustable-rate mortgage to help answer this question. We find that homeowners responded by increasing their spending both in advance of the anticipated drop in their mortgage payment and in the post-reset period, despite a considerable drop in housing wealth. Our analysis further highlights how housing policy that influences the share of fixed-rate mortgages versus variable-rate mortgages can impact the overall effectiveness of monetary policy.
See the Findings “The Consumer Spending Response to Mortgage Resets: Microdata on Monetary Policy”
Shedding Light on Daylight Saving Time
Daylight Saving Time has been advanced as a policy that both saves energy and increases consumer spending. In this brief, the JPMorgan Chase Institute has explored whether or not the latter claim is supported by evidence. We found that daily card spending per capita in Los Angeles experienced a relative increase of 0.9 percent in the 30 days following the start of DST, and experienced a relative decline of 3.5 percent in the 30 days following end of DST.
Download the Report “Shedding Light on Daylight Saving Time”
Small Business Data Resources
Research-quality data on small businesses, including those from government, non-profit, and private sector sources, can be dispersed and difficult hard to find, particularly data from government, non-profit and private sector sources. We have collected information on data sources as an aid to other empirical researchers interested in better informing the small business sector.
View the List