Utah has a very high rate of bankruptcy. In 2000 it hovered at around 7 filings per thousand people– twice the national average. This lonely fact has launched a thousand explanations for why Mormons have such a problem with defaulting on their creditors. Clearly, the thinking seems to be, this shows some of the rot in the Kingdom. Just as clearly, this view has very little support in the data.
I agree wholeheartedly that there is way too much bankruptcy in Utah, Mormondom, and the U.S. generally. But I admit to a hearty skepticism about whether mormons are more likely to over-consume or bilk creditors compared to other Americans. I think there is a strong, and poorly grounded, desire to lay everything about Utah at the feet of Mormonism.
Consider, then, some evidence drawn from a recent paper I wrote on bankruptcy*. We have bankruptcies per thousand by zip code averaged over 1999-2001. We have 2000 Census demographic info by zip code. Lastly we have the percentage of the population that is LDS by county (this last from the Glenmary survey in 1990). In the raw data, LDS population is correlated to a higher bankruptcy rate, no question. This is largely because Utah has tons of Mormons and it has lots of bankruptcy. But suppose one fears that this is due to the fact that Mormons live in the west, and even more specifically, they happen to live in Utah. Is there any way to sperate the Utah legal environment from the Mormon cultural propensity? Well the statistical wizards here at T&S have mystical ways of dealing with such things. So, one can look at bankruptcies by zip code solely within Utah. At that point, we can see if, given the Utah environment, Mormon counties are more or less likely to file bankruptcy. And here the relationship is strongly negative. In other words, more mormons in the county within Utah means far less bankruptcy than Utah counties with lots of Gentiles. In fact, one can do this “within” comparison across all states and get the same thing– more mormons within a county (compared to the state average) indicates noticeably less bankruptcy (also compared to the state average).
Of course, there are also lots of “controls” one might wish to put in. Perhaps mormons just tend to be populating high income cities, for example. So unload the kitchen sink of demographic and household characterstics into the regression to control for these differences and you find that mormon-ness is unrelated to bankruptcy in Utah, and still negatively related outside of Utah when, once again, you only look at differences within each state, not across states.
None of this changes the fact that Utah has a high bankruptcy rate. But it turns out that bankruptcy rates are largely different across states due to institutional and legal features of credit default in the particular state. And those features don’t have much to do with mormon-ness at all. Tennessee, for example, has a similar bankruptcy rate to Utah because it has a similar legal setup for dealing with bankruptcy. Suffice it to say that there is no evidence in this data that mormon-ness leads to higher bankruptcy. So the next time somebody pulls out a statistic about Utah and then wishes to foist it upon the Church or the effect of Mormon culture, I’d suggest a certain cheery skepticism.
*The paper had nothing to do with Mormons, and when it gets accepted I’ll be happy to share those results, but for now here’s the Mormon angle.