Claire Brennecke
Home Address:
32 Nash Street
Apt A
New Haven, CT 06511
Office Address:
Department of Economics
Yale University
New Haven, CT 06520
Telephone: (202) 507-2204
E-mail: claire.brennecke@yale.edu
Website:
sites.google.com/site/a/yale.edu/clairebrennecke/
Citizenship: USA
Fields of Concentration:
Economic History
Finance
Desired Teaching:
Economic History
Macroeconomics
Finance
Comprehensive Examinations Completed:
2011 (Oral): Macroeconomics, Finance
2010 (Written): Macroeconomics, Microeconomics
Dissertation Title: Essays on Early American Credit Reporting
Committee:
Professor Gary Gorton (co-chair)
Professor Naomi Lamoreaux (co-chair)
Expected Completion Date: May 2015
Degrees:
Ph.D., Economics, Yale University, Expected May 2015
M.Phil., Economics, Yale University, December 2012
M.A., Economics, Yale University, May 2012
B.A., Economics (First Class Honours), McGill University, 2008
Fellowships, Honors, and Awards:
National Science Foundation Doctoral Dissertation Research Improvement
Grant, 2013
Rovensky Fellowship in U.S. Business or Economic History, 2013
Economic History Association Exploratory Travel and Data Grant, 2013
Charles V. Hickox Fellowship Fund, 2012-2013
Alfred Chandler Jr. Travel Grant, Harvard Business School, 2012
Yale University Graduate Fellowship, 2009 – 2014
Yale University Cowles Foundation Fellowship, 2009 – 2013
Fred Victor Stone Memorial Prize, McGill University, 2008
Teaching Experience:
Intermediate Macroeconomics (undergraduate; instructor: W. Nordhaus),
Fall 2011
Macroeconomic Theory (undergraduate; instructors: M. Galenianos (Spring
2012, G. Moscarini (Spring 2013)))
Welfare Economics and Equity (undergraduate; instructor: D. Brown (Summer
2012 and 2013))
Game Theory (undergraduate; instructor: B. Polak)
American Economic History (undergraduate; instructor: J. Wallis) Spring 2014
Research Experience:
Research Assistant, Division of Research and Statistics, Federal Reserve Board of
Governors, 2008 – 2009
Research Assistant, Professor Leah Brooks, McGill University, 2006 – 2008
Working Papers:
“Information Acquisition in Antebellum U.S. Credit Markets,” (November 2014),
Job Market Paper
Seminar and Conference Presentations:
Business History Conference (March 2014)
National Bureau of Economic Research Summer Institute: Development of the
American Economy (July 2014) – Poster
Economic History Conference (September 2014) -- Poster
References:
Prof. Gary Gorton
Yale University
School of
Management
PO Box 208200
New Haven, CT
Phone: 203-436-2857
gary.gorton@yale.edu
Prof. Naomi Lamoreaux
Yale University
Department of Economics
PO Box 208281
New Haven, CT 06520
Phone: 203-432-3625
naomi.lamoreaux@yale.edu
Prof. Tim Guinnane
Yale University
Department of Economics
PO Box 208281
New Haven, CT 06520
Phone: 203-432-3616
timothy.guinnane@yale.edu
Dissertation Abstract
Economic theory tells us that information asymmetries influence outcomes when
borrowers and lenders contract. The primary way that lenders can resolve
information asymmetries is by purchasing information from a credit rating agency.
But we know very little about when and how much lenders rely on these agencies.
In my dissertation I investigate the role of the first credit reporting agency, the
Mercantile Agency of R.G. Dun & Co., in the 19th century U.S. trade credit market. In
the first chapter, I provide evidence on when and how much subscribers accessed
credit reports. In the second chapter, I describe the bias in early credit reporting and
discuss its implications on access to credit.
Chapter 1: “Information Acquisition in Antebellum U.S. Trade Credit Markets”
(Job Market Paper)
In my job market paper, I empirically investigate how subscribers to the first credit
reporting agency, the Mercantile Agency of R.G. Dun & Co., used credit reports to
learn about borrowers and trading partners in Antebellum America. I find that
lenders accessed only a fraction of the reports produced by the Agency and were
more likely to access a report when they received bad news, be it aggregate or
idiosyncratic. These results are consistent with models of the information
insensitivity of debt and older financial accelerator-style models in which lenders
“fly to quality” when they experience an increase in the cost of lending.
This project draws on a new dataset collected from the credit report records of R.G.
Dun on all firms in New Orleans and all New York City subscriber inquiries between
1850 and 1860. I am able to provide novel insight into information acquisition due
to a feature of the credit report records that I discovered: the Agency recorded when
subscribers did and did not inquire after credit reports.
From these data, I present a striking new fact: subscribers to the Mercantile Agency
accessed only 25% of the information the Agency provided, despite having already
paid for membership. Furthermore, subscribers accessed reports for only half of the
firms for which the Agency produced reports. There was also a substantial lag
between when the Agency started reporting on a firm and when a subscriber first
accessed a report for the firm.
I use a parametric duration model with time varying covariates to estimate the
determinants of this lag. My analysis suggests that one primary reason that lenders
were so selective in the information that they accessed was that they acquired
information in response to bad news about specific borrowers and the aggregate
economy.
I find that NYC subscribers were more likely to access a credit report for the first
time when there were they received bad news from idiosyncratic firm shocks,
portfolio shocks, and aggregate shocks. In particular, a subscriber inquired after a
firm in New Orleans if: (1) the firm had recently defaulted; (2) another borrower
that the subscriber had a relationship with defaulted; (3) there was an adverse
shock to the New York money market; or (4) the price of cotton decreased suddenly
in New Orleans. These results suggest that subscribers did not always obtain all
available information before they extended credit and credit report information was
most valuable when subscribers were concerned about default.
Chapter 2: "Race, Country of Origin, and Net Worth: Credit Report Coverage in
Antebellum New Orleans." (Work in Progress)
In the 19th century, mercantile credit reporting agencies facilitated access to trade
credit for frontier mercantile establishments. Starting in 1841, companies such as
the Mercantile Agency produced credit reports on mercantile firms across the US,
providing a valuable opportunity for wholesale distributors in Northeastern port
cities to gather information about trading partners elsewhere in the U.S. The
existing literature provides little evidence on what types of businesses mercantile
reporting agencies produced information and how this information might have
impacted access to trade or credit. If wholesale lenders relied on credit reports
before contracting, a merchant borrower might have been at a disadvantage if the
reporting agency failed to produce information about him. To begin understanding
how credit reporting might have negatively impacted certain types of merchants, I
investigate if there was systematic bias in report coverage in the Mercantile Agency
credit reports about merchant borrowers in New Orleans between 1850 and 1860. I
link the credit report records to New Orleans city directories and US census records
and test whether there was systematic bias in reporting based on several
dimensions: race, nationality, net worth and industry. Next, I ask whether
subscribers to the Mercantile Agency differentially inquired after reports based on
these dimensions. I conclude by discussing whether there is evidence of bias in how
the Agency supply of information, whether that bias was driven by demand for
information from subscribers, and what impact these findings likely had on trade
and access to credit.