Brian Baugh
bbaugh2@unl.edu
HLH 425R, PO Box 880490, Lincoln, NE 68588
UNL faculty website
SSRN Author Page
Google Scholar Page
Work Experience
University of Lincoln - Nebraska (2023-Current) - Associate Professor of Finance
University of Lincoln - Nebraska (2017-2023) - Assistant Professor of Finance
University of Lincoln - Nebraska (2016-2017) - Lecturer
Ohio State University (2014) - Instructor
Boeing (2006-2009, 2011) - Systems Engineer
Education
Ph.D., Finance, Ohio State University - 2017
M.B.A., Brigham Young University - 2010
B.S., Mechanical Engineering, Brigham Young University - 2006
Research Interests
Household Finance, Behavioral Finance, Corporate Finance, Tax.
Published Papers
Customer Churn and Intangible Capital (with Scott Baker and Marco Sammon). Journal of Political Economy — Macroeconomics (July 2023).
We develop and make available firm-level metrics regarding a key component of intangible capital—firms’ customer bases—using household transaction data. Linking household spending to top customer-facing firms, we show that churn in customer bases is associated with lower markups and market-to-book ratios and higher leverage. Churn is closely linked to firm-level volatility and risk. This new measure provides a clearer picture of firms’ customer and brand capital than existing metrics and is also observable for private firms. We demonstrate that low levels of customer churn push firms away from neoclassical investment responsiveness and that low-churn firms are better able to insulate organization capital from the risk of key-talent flight.
Does Paycheck Frequency Matter? Evidence from Micro Data (with Filipe Corriea). Journal of Financial Economics (March 2022).
Using a unique dataset from an account aggregator, we analyze cross-sectional differences and within-household time-series variation in paycheck frequency. We find that higher paycheck frequency results in less credit card borrowing, less consumption, but more instances of financial distress --- even when the change in paycheck frequency is employer-initiated. We find that pay frequency strongly determines within-month time patterns of financial distress. Our theoretical model reconciles these empirical results --- higher paycheck frequency increases consumers' willingness to allocate to illiquid savings vehicles, leading to a reduction in both consumption and within-paycycle borrowing.
Asymmetric Consumption Smoothing (with Itzhak Ben-David, Hoonsuk Park, and Jonathan Parker). American Economic Review (January 2021).
Analyzing account-level data from an account aggregator, we find that households increase consumption when they receive expected tax refunds, as if they face liquidity constraints. However, these same households smooth consumption when making payments in other years, primarily by transferring funds among liquid accounts. Even households carrying credit card debt smooth consumption when making payments, and even highly liquid households spend out of refunds. This behavior is inconsistent with pure liquidity constraints or hand-to-mouth behavior and is most consistent with a mental accounting life-cycle model.
Presented at Cleveland Federal Reserve Bank Conference (2013), Philadelphia Federal Reserve Bank Payments Conference (2013), Whitebox Advisors Graduate Student Conference (Coauthor, 2014), OSU Econ (Coauthor, 2013), WFA (2014 (previous version)), AEA(2015) WFA (2018, Coathor).
Income Fluctuations and Firm Choice (with Scott Baker and Lorenz Kueng), Journal of Financial and Quantitative Analysis (July 2020).
How households shift spending across firms in response to income fluctuations is an important source of firm risk. Using transaction-level data, we study how households interact with the universe of retailers following income changes. We find that income increases within and across households result in substitution toward retailers in a category that are higher quality; smaller; more profitable; and have higher labor intensity, research and development (R&D) intensity, and equity betas. Although not all shifts are economically large, they do not average out across retailers. Thus, retailer choice has implications for key financial and macroeconomic outcomes, such as aggregate profitability and labor demand.
The 'Amazon Tax': Empirical Evidence from Amazon and Main Street Retailers (with Itzhak Ben-David and Hoonsuk Park), Journal of Finance (August 2018).
For years, online retailers have maintained a price advantage over brick-and-mortar retailers by not collecting sales tax at the time of sale. Recently, several states have required that online retailer Amazon collect sales tax during checkout. Using transaction-level data, we document that households living in these states reduced their Amazon purchases by 9.4% following the implementation of the sales tax laws, implying elasticities of –1.2 to –1.4. The effect is stronger for large purchases, where purchases declined by 29.1%, corresponding to an elasticity of –3.9. Studying competitors in the electronics field, we find some evidence of substitution toward competing retailers.
Presented at Israeli Industrial Organization Conference at Tel-Aviv University (Coauthor, 2013), AEA (Coauthor, 2016), NBER Universities' Research Conference (2016), NBER Public Economics Program (2016), NBER Entrepreneurship and Economic Growth Conference (2016), Berkeley Econ (2016).
Abbreviated media coverage: WSJ, NPR, Bloomberg (1, 2, 3), NYT (1, 2), Forbes, Reuters, Time, Business Insider, Chicago Tribune, Seattle Times, Salon, VOX (1, 2), CSMonitor, Motley Fool, Geekwire).
Working Papers
When Is It Hard to Make Ends Meet? (with Jialan Wang)
We analyze how predictable variation in the timing of income affects household financial health. Exploiting quasi-random variation in the disbursement of benefits by the Social Security Administration, we document that households are more likely to face financial shortfalls during 35-day versus 28-day pay periods. Households are also more likely to experience shortfalls if they have a greater mismatch between the timing of income and expenditure commitments. These patterns are difficult to reconcile with the lifecycle / permanent income hypothesis. The results suggest that policies and technologies that help consumers align the timing of their income and expenditure streams would improve financial health.
Presented at Federal Reserve Board (Coauthor), NBER Household Finance (Coauthor), NBER Law and Economics (Coauthor), SFS Cavalcade (Coauthor), RRC Meeting (Coauthor), Social Security Administration (Coauthor), UC Irvine (Coauthor), and Stanford Institute for Theoretical Economics.
Media coverage: Tech Crunch
Payday Borrowing and Household Outcomes; Evidence from a Natural Experiment
This paper examines the effect of restricting payday credit to payday users. Using administrative banking data from over fifteen thousand online payday borrowers, I exploit a natural experiment surrounding a 2013 U.S. Department of Justice initiative known as Operation Choke Point (OCP) that unexpectedly shut down dozens of online payday lenders. Using a difference in differences framework, I find a persistent reduction in payday borrowing of treated households, those with a pre-existing relationship with a lender that is shut down. Relative to control households, treated households reduce borrowing by $91 per month, reduce the number of bounced checks by 14%, reduce the number of overdrafts by 4%, increase consumption by 2%, and exhibit no increase in consumption volatility. The effects are persistent and grow in magnitude over time. A cross-sectional analysis reveals that the positive outcomes following restricted payday loan access are concentrated among the heaviest pre-treatment borrowers. I conclude by analyzing the types of purchases these loans finance and find that approximately half of abnormal spending the week of payday borrowing is spent on predictable categories such as mortgages, car loans, and insurance. Surprisingly, I find evidence of abnormal gambling activity immediately preceding and following payday borrowing.
Presented at Cleveland Federal Reserve Bank Conference (2015), Delaware (2015), Brigham Young University (2015), Fordham (2015), Pepperdine (2015), Nebraska (2015), South Carolina (2016), SMU (2016), GA Tech (2016), Notre Dame (2016), Berkeley Econ (2016), Western Finance Association (2017).
Media coverage: Bloomberg
Works in Progress
Choice-Based Pension Plans and Arbitrary Wealth Accumulation (with Itzhak Ben-David and Isil Erel)
Teaching
2022 to present - RAIK 381H: Honors Fundamentals of Finance
2018 to present - FINA 361H: Honors Finance
2017 to present - FINA 467/867: Options, Futures and Derivative Securities
2014 - BUSFIN 4211: Corporate Finance
Professional Service
Ad-hoc referee: Review of Financial Studies, Management Science, Review of Economics and Statistics, National Tax Journal, Journal of Banking and Finance, American Economic Journal (Economic Policy).
Dissertation Committee
René Stulz (Chair), Ohio State University
Zahi Ben-David, Ohio State University
Berk Sensoy, (now Vanderbilt)
Jonathan Parker, Massachusetts Institute of Technology
Honors and Awards
2020 - Emerging Scholar Research Award
2015 - AFA Student Travel Grant
2013 - NBER Household Finance Grant (with Itzhak Ben-David and Hoonsuk Park)