This study examines the association between the location, relative to the coast, of an individual’s primary residence and the homeowners’ risk tolerance. Utilizing data from the 2021 National Financial Capability Study and employing a probit model, we analyzed how varying risk tolerance levels affect the likelihood of owning a home in a coastal ZIP code. The respondent’s risk tolerance was classified as high, medium, or low according to their self-reported willingness to take financial risks. Our results suggest that individuals with lower risk tolerances are less likely to own a home within a coastal ZIP code. Specifically, homeowners with medium-risk tolerance are 2.91% less likely, and those with low-risk tolerance are 3.17% less likely to own a primary residence in a coastal ZIP code when compared to those with high-risk tolerance. These results are statistically and economically similar when using a logit model. These findings are both statistically significant and align with economic theory. The analysis also included various demographic and socioeconomic factors, finding that age, income, and certain employment statuses influence coastal homeownership. This research contributes to the understanding of home ownership location choices and risk tolerance. Our results provide policymakers with insights into the risk characteristics of individuals who prefer coastal areas as their primary residences. This information can inform future policy decisions by highlighting the societal and economic implications of regulations related to residential coastal development.

This study examines the association between self-employment, otherwise known as entrepreneurship, and student loan debt. Based on data from the 2021 National Financial Capability Study, which were analyzed using a multinomial probit model, our results suggest that households that used student loans to finance the education of one household member are more likely to report that the other member of the household pursued self-employment, with everything else remaining equal. This association between student loans and household self-employment is both economically and statistically significant. Our results highlight the importance of alternative forms of financing for entrepreneurship and expand upon existing knowledge about the unintended effects of student loans. Policymakers should consider these results when analyzing the various intended and unintended benefits of policies affecting the availability of student loans.

Corporate management and their auditors are required to evaluate whether there is a risk that the company’s ability to continue as a going concern is impaired. For fixed asset-intensive firms, however, regulatory inspections consistently identify problems with auditors’ testing of property, plant, and equipment (PPE), raising doubts about whether auditors understand the risks associated with these assets. This paper examines whether auditors incorporate the risks associated with PPE into their going concern evaluation and the accuracy of that evaluation. Using probit regression on financial and auditing data of U.S. public firms contained in S&P Global Compustat North America, Audit Analytics, and the Center for Research in Security Prices (CRSP) from 2000 to 2019, this paper examines the effects of PPE intensity, impairment, and age on the likelihood that an auditor issues a going concern modification. We test the accuracy of the auditor’s going concern evaluation by comparing it to the client’s subsequent viability or bankruptcy. Our results find that PPE intensity and PPE impairments are positively associated with the likelihood of an auditor issuing a going concern modification, indicating that auditors view PPE as contributing to substantial doubt about the entity’s ability to continue as a going concern. We do not find a significant association between PPE age and going concern modification. Additionally, the going concern evaluation is more accurate for firms with higher PPE intensity. These findings imply that auditors appropriately consider PPE assets in their going concern evaluations.