Introduction:
The term “Unbanked” is a characteristic that describes people who do not have bank accounts. In 2017, more than 7.8% of New York State’s population were unbanked, compared to a national rate of 6.5%.
This rate tends to be even higher for New York city. In 2013, the unbanked households’ rate in New York City was 11.7%, compared to a state rate of 8.5% and a national rate of 7.7% at the time. The highest unbanking rate is found in the Bronx, where it exceeds 20%
(FDIC, 2019).
In 2015,
the Urban Institute published a report that focused on identifying neighborhoods that have a high ratio of unbanked neighborhoods. Furthermore, the report investigates how neighborhood characteristics, such as income, poverty and demographics might relate to the banking status of its residents. This research project builds up on the
Urban Institute's report and attempts to identify which socio-economic feature if a neighborhood affects residents' banking status.
Data:
One underlying limitation in the available data is the geographic unit used. The only publicly available data about banking status was classified by Public Use Microdata Areas (PUMA). New York City contains 55 PUMAs, each of which contains a number of census tracts. Combining census tracts results in loss of information about the individual socio-economic characteristics of each census tract. More granular information could be insightful for this analysis and would increase the model's accuracy and precision.